General Principles of Taxation

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Taxation

inherent power to raise revenue to defray the expenses of the government. manner of apportioning the costs of the government.

Taxation is Inherent to the State

its power comes from the theory that the existence of a government is necessary. its exercise is guaranteed by the mere existence of the state. it can be exercised without a constitutional grant.

Scope of the Legislative Power to Tax

It determines the following:

• purpose for taxes to be levied

• subjects of taxation 

• amount or rate of tax 

• kinds of taxes to be collected

• agencies to collect the taxes 

• administrative and judicial remedies 

• tax exemptions and condonation

Taxation Theories

• Life Blood Theory 

• Necessity Theory 

• Symbiotic Relationship Theory 

Life Blood Theory 

taxes are the lifeblood of the government  it should be collected without unnecessary hindrance

Necessity Theory 

government is a necessity, but it cannot continue without the means of paying for its existence. tax is a necessary burden to preserve the State’s sovereignty

Symbiotic Relationship Theory 

without taxes, the government would be paralyzed. every person must contribute his share in running the government. the government must respond with tangible and intangible benefits to improve the lives of the people.

Primary Purpose of Taxation

raise revenue and support the existence of the state

Secondary Purpose of Taxation

non revenue or sumptuary

• Promotion of General Welfare

• Regulation 

• Reduction of Social Inequity 

• Encouragement of Economic Growth 

• Protectionism

Characteristics of the Power to Tax

• Comprehensive 

• Unlimited 

• Plenary 

• Supreme

Comprehensive

covers person businesses, activities, professions, rights and privileges

Unlimited

Unlimited in force. The courts scarcely subject it to restrictions

Plenary 

complete, unqualified, absolute

Supreme

insofar as the collection of the subject of taxation is concerned