G.

NATURE, CONSTRUCTION,
APPLICATION, AND SOURCES
OF TAX LAWS
1. Nature of Internal Revenue Law

They are not political in nature.

Tax Laws are Civil and not Penal in nature.

 2. Construction of Tax Laws

a. Legislative intention must be considered. tax

laws should be interpreted with a view of carrying
out their purpose and intent.
b. In case of doubt. tax statutes are construed
strictly against the government and liberally in
favor of the taxpayer.
c. Where the language is plain. words employed
are given their ordinary meaning.
d. Taxpayer claims exemption.
e. Conflict with other laws.
 3. Application of Tax Laws

a. Generally Prospective. tax could not be

foreseen or understood.
b. Exception. when retroactivity is expressly
declared or the legislative intent is very clear.
c. Applicability of Tax Treaties.
 4. Sources of Tax Laws

a. Legislation or statutes;
b. Administrative rules and regulations, opinions of
tax officials;
c. Judicial decisions.
d. Tax treaties with other countries.