Taxation

• Taxation


  Sovereign, through its law-making body, imposes burdens upon subjects and objects within jurisdiction for the purpose of raising revenues to carry out the legitimate objects of the government
• Inherent powers of the state

  • Police power
  • Power of taxation
  • Power of eminent domain
• Purpose of taxation


  • Primary: Revenue or fiscal purpose
  • Secondary: Regulatory purpose
• Theories of taxation


  • Lifeblood theory
  • Necessity theory
  • Reciprocity theory
• Power of taxation


  • Most absolute of all powers of the government
  • Comprehensive privileges - covers all persons, businesses, activities, professions, rights
  • Unlimited - absence of limitations
  • Plenary - as it is complete; avail certain remedies to ensure collection
  • Supreme - in so far as the selection of the subject of tax
• Why taxation is important
• Aspects of taxation


  • Levying
  • Assessment
  • Collection
• Taxes


  Enforced proportional contributions or charges from persons and property, levied by the law-making body of the State by virtue of its sovereignty for the support of the government and all public needs
• Classification of taxes as to scope

  • National
  • Local
• Classification of taxes as to subject matter or object

  • Personal, poll or capitation
  • Property
  • Excise
• Classification of taxes as to who bears the burden

  • Direct
  • Indirect
• Classification of taxes as to determination of amount

  • Specific
  • Ad valorem
• Classification of taxes as to purpose

  • Primary, fiscal
  • Secondary, regulatory, special or sumptuary purpose
• Classification of taxes as to graduate or rate

  • Proportional
  • Progressive
  • Regressive
• Classification of taxes as to taxing authority

  • National
  • Local national
• Other national taxes other than those collected by the BIR as provided for under special laws


  • Customs duties
  • Taxes on narcotic drugs
  • Special education fund taxes
  • Energy taxes on aircraft, motorized watercraft, and electric power consumption
  • Sugar adjustments taxes
  • Travel tax
  • Private motor vehicle tax
• Essential elements of tax

  • It is an enforced contribution
  • It is generally payable in money
  • It is proportionate in character
  • It is levied on persons, property, or the exercise of a right or privilege (subjects or objects of taxation)
  • It is levied by the law-making body of the state
  • It is levied for public purpose
• Situs of taxation


  Literally, situs of taxation means "place" of taxation. It is the State or political unit which has jurisdiction to impose a particular tax. The State where the subject to be taxed has a situs may rightfully levy and collect the tax. The situs is necessary in the State which has jurisdiction or which exercises dominion over the subject in question.
• Factors to consider in determining the situs of taxation


  • Subject matter (person, property, or activity)
  • Nature of tax
  • Citizenship
  • Residence of the taxpayer
  • Source of income
  • Place of excise, business or occupation being taxed