Engkings Note

Taxation - Power wherein the sovereign raise revenue to defray the necessary expenses of the government
from among those who in some measure are privileged to enjoy its benefits and, therefore, must bear its
burdens. Primary purpose is to raise revenue (taxing power) if for regulatory purposes (police power).
Both powers are supreme. Taxation (coverage is plenary and unlimited) and Police Powed (can impair vested
rights).
Tax - Enforced proportional contributions from proeprerties and persons levied by the state by virtue of its
sovereignty for the support of th govt and public needs made by the legislative body in order to raise revenue
despite the absence of constitutional provisions (inherent nature). It is the congress how have an unlimited
power to exercise power of taxation. Delegated powers need concurrence from congress.
Nature of the Power of Taxation
1.Inherent prerogative of the sovereignty (lifeblood theory)
2. Legislative in Character ( Taxes are a grant of the people who are taxed and the grant must be made by
the immediate rep of the people). All revenue appropriation must originate in the house of rep. GR : cannot be
delegated except : Local taxes by LGUS (consti provides delegation of power to LGU congress merely set out
limitation), Flexible Tariff Clause, Administrative Regulation
Scope: To determine
Purpose, subjects and objects of taxation within its jurisdiction( persons, business, rights, priviliges etc),
amount and rate of taxes (must be uniform and equitable, remedy for unjust and oppresive tax is election of
new reps.,kind of taxes collected, apportionment of the tax, situs of taxation, Grant tax exemption or
condonation, Provision of administrative and judicial remedies that may be availed bythe taxpayers
and government .
Basis of Taxation : Necessity Theory: i. Necessity to serve the people ii. Necessity to protect the people
Importance of taxation : Lifeblood doctrine (without taxes, the government will be paralyzed for the lack
of motive to operate)
Doctrine of Symbiotic Relationship
a. Support by the taxpayers
b. Protection and benefits by the government (The protection is in the form of security (either
tangible/intangible aspects)
VII. PURPOSE AND OBJECTIVE OF TAXATION i. 4 Rs of Taxation
a. Revenue
b. Redistribution
c. Re-pricingi.e. sin taxes, as a way to change behavior

d. Representationdemand for accountability from the government on taxes collected

Primary - revenue raising
Secondary- non revenue raising ( regulation, promotion of general welfare (police power imp), reduction of
social inequalities ( the undue concentration of
wealth in the hands of a few individuals), encourage economic growth (giving lower tax rates, protectionism
(to protect local industries from foreign competition.).

SCOPE of TAXATION
Unlimited - with regards to object/subject of taxation subject to inherent limitations ,Comprehensive ,
Plenary,Supreme
Aspect of Taxation
Levy or Imposition (Legislation) enactment of law by congress, who will be tax, how much, manner of
collection ta, who has the responsibility in the levy of imposition
Assessment applying the law, compute how much the tax is
Collection BIR, BOC, Provincial, City, and Municipal Assessor and Treasurers (Only Levy must be done by
the legislative. The other may be delegated to others like BIR and Bureau of Customs.)
Payment-tax payers responsibility.
X. BASIC PRINCIPLE OF A SOUND TAX SYSTEM (F-A-T-E)
i. Fiscal Adequacy - source of revenue should be sufficient to meet demands of public expenditure, must be
elastic and capable of expanding or contracting annually in response to variations in pub exp
ii. Theoretical Justice or Equity Ability to pay doctrine - tax burden should be distributed in proportion to
the taxpayers ability to pay. Similarly situated taxpayers should pay equal taxes, while those who have more
should pay more. Taxation should be uniform as well as equitable.
iii. Administrative Feasibility -means that tax laws should be capable of conveniently, effectively enforced by
the government, its a question of cost-benefit, assessment and collection must not be more costly than what
can becollected and assessed (i.e. if all taxpayers will be audited, it will be costly. Thus, taxpayers are
grouped into big and (small) taxpayers; it is not feasible for the government to audit all taxpayers)
iv. Economic Efficiency - must be fiscally and administratively feasible.