Taxation

• Nature of Taxation

  1. Inherent in sovereignty
  2. legislative in character
• Inherent in sovereignty - taxation is an inherent power of every government. A state cannot exist without taxation to support its operation and welfare of people.
• Legislative in character - government's inherent power to impose and collect taxes is exercise through its legislative branch or the congress.
• The inherent powers of the state

  1. Police Power
  2. Power of Taxation
  3. Power of Eminent Domain
• Police Power - it is the power of the state for promoting public welfare by restraining and regulating the use of liberty and property. It may be exercise only by the government. The property taken in the exercise of this power is destroyed because it is noxious or intended for a noxious purpose.
• Power of Taxation - it is the power by which the State raises revenue to defray the necessary expenses of the government.
• Power of Eminent Domain - It is the power of the State to acquire private property for public purpose upon payment of just compensation.
• A national tax is imposed by the government
• A local tax is imposed by the municipal corporations or local government units (LGUs).
• Classification of taxes as a scope

  1. National
  2. local
• Classification of taxes as to subject matter or object

  1. Personal poil or capitation tax
  2. property tax
  3. Excise Tax
• Personal, poil or capitation tax - A tax of a fixed amount imposed upon individual, whether citizens or not, residing within a specific territory without regard to their property or the occupation in which he may be engaged.
• Property tax - Tax imposed on property, whether real or personal, in proportion either to its value, or in accordance with some other reasonable method of apportionment.
• Excise Tax - Any tax which does not fall within the classification of poll tax or property tax. This is a tax on the exercise of certain rights and privileges.
• Essential Elements Of a Tax

  1. It is an enforced contribution.
  2. It is generally payable in money.
  3. It is proportionate in character.
  4. It is levied on persons, property, or the exercise of a right or privilege (subjects or objects of taxation).
  5. It is levied by the law-making body of the state.
  6. It is levied for public purpose.
• SIMILARITIES AMONG THE THREE (3) INHERENT POWERS

  • They are inherent in the State.
  • They exist independently of the constitution although the conditions for their exercise may be prescribed by the constitution.
  • Ways by which the state interfere with the private rights and property.
  • Legislative in nature and character.
  • Presuppose an equivalent compensation received, directly or indirectly, by the persons affected.