LIT 305 Law on Income Taxation - Unit 1 General Principles

Vocabulary flashcards covering core definitions, principles, doctrines, and exactions from Unit 1 General Principles of Taxation.

Taxation

The inherent power of the State to demand enforced contributions from persons, property, and rights within its jurisdiction for the support of the government and for public purposes.

Ad invitum

A characteristic of taxation meaning 'against one's will', describing taxes as mandatory forced charges.

Lifeblood Theory

The doctrine that taxes are the lifeblood of the government, necessary for its existence and operation, which must be collected promptly while respecting lawful and substantiated taxpayer rights.

License Fee

A regulatory exaction imposed under police power limited to the necessary expenses of regulation, inspection, and control, non-payment of which makes a business illegal.

Toll

An exaction representing compensation for the use of property or improvements based on proprietorship, non-payment of which results only in a civil action.

Special Assessment

An exaction levied exclusively on land specially benefited by a public improvement, resulting in a lien on the land in case of non-payment.

Tax Debt

A financial obligation based on contract that is assignable and subject to set-off, non-payment of which cannot result in imprisonment unless arising from a crime.

Direct Double Taxation

An objectionable form of taxation occurring when all six elements are present: same property, same purpose, same authority, same jurisdiction, same period, and same kind or character of tax.

Indirect Double Taxation

A permissible form of double taxation where one or more of the six elements of direct double taxation are absent.

Tax Avoidance

A legal and valid tax-saving device used to minimize tax liability through lawful means without fraud, deceit, or concealment.

Tax Evasion

An illegal scheme to minimize or eliminate tax liability using unlawful means, characterized by an evil state of mind, bad faith, and deliberate fraud or concealment.

Par in parem non habet imperium

The international law principle of comity holding that co-equal sovereigns cannot exercise jurisdiction or tax one another.

Pacta sunt servanda

The principle of international law requiring treaty obligations to be performed and honored in good faith, prevailing over domestic administrative issuances.

Strictissimi Juris

The rule of strict construction applied against taxpayers and liberally in favor of the taxing authority regarding tax exemptions, exclusions, refunds, and amnesties.

Inherent Limitations of Taxation (S-P-I-N-E)

The five inherent boundaries of the taxing power: Situs/Territoriality, Public Purpose, International Comity, Non-delegability, and Exemption of Government.

Requisites of a Valid Tax (U-J-I-P)

The four essential requirements of a tax: Uniformity, Jurisdiction over subject, compliance with Inherent and constitutional limitations, and Public purpose.

Purposes of Taxation (R-R-P-R-E-P)

The six primary goals of taxation: Revenue, Regulatory, Promotion of general welfare, Reduction of inequality, Encourage economic growth, and Protectionism.

Lutz v. Araneta Doctrine

The legal rule establishing that taxation may be exercised as an implement of police power to promote general welfare and stabilize a threatened industry affected with public interest.

Manila Memorial Park, Inc. v. DSWD Doctrine

The rule establishing that the mandatory senior citizen discount is an exercise of police power regulating prices, not eminent domain, and thus does not require just compensation or peso-for-peso reimbursement.

Ormoc Sugar Co. v. Treasurer of Ormoc City Doctrine

The equal protection doctrine requiring tax classifications to apply equally to all members of a class, including future entities, and prohibiting tax ordinances from singling out a taxpayer by name.