[LSPU COLLEGE OF

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[ TAXATION LAW]

GENERAL PRINCIPLES OF
TAXATION
>Concept, Underlying Basis and
Purpose<
TAXATION- Taxation is the inherent
power of the sovereign, exercised
through the legislature, to impose
burdens upon the subjects and objects
within its jurisdiction, for the purpose
of raising revenues to carry out the
legitimate objects of the government.
TAXESEnforced
proportional
contributions from properties and
persons levied by the State by virtue
its sovereignty for the support of the
government and for public needs.
BASIS OF TAXATION

5) It is levied by the State which

has jurisdiction over the subject
or object of taxation
6) It is levied by the law-making
body of the State
7) It is levied for publics purpose
or purposes
REQUISITES of a VALID TAX
1) It should be for a public purpose
2) The rule of taxation should be
uniform
3) That either the person or
property taxed be within the
jurisdiction
of
the
taxing
authority
4) That
the
assessment
and
collection be in consonance with
the due process clause
5) The tax must not infringe on the
inherent
and
constitutional
limitations of the power of
taxation

> GOVERNMENTAL NECESSITY

*
The
existence
of
the
government depends upon its capacity
to perform its two (2) basic functions:
A.. to serve the people
B.. to protect the people

*> Taxes are the lifeblood of the

government
and
should
be
collected
without
unnecessary
hindrance. But their collection
should
not
be
tainted
with
arbitrariness

THEORY OF TAXATION
>RECIPROCAL DUTIES OF
SUPPORT AND PROTECTION
1) Support on the part of the
taxpayers
2) Protection and benefits on
the part of the government
ESSENTIAL ELEMENTS OF A TAX
1)
2)
3)
4)

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

CEBU PORTLAND CEMENT vs. CTA

L-29059 Dec. 15, 1987
Facts: CTA

decision

ordered

the

petitioner CIR to refund to the Cebu

Portland
respondent,
representing

Cement
P

Company,
359,408.98

overpayments

of ad

valorem taxes on cement sold by it.

Execution of judgement was opposed
by the petitioner citing that private
respondent had an outstanding sales
tax liability to which the judgment
debt had already been credited. In
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fact, there was still a P4 M plus

Thereby, we hold that the respondent

balance they owed. The Court of Tax

Court of Tax Appeals erred in its order.

Appeals, in holding that the alleged

sales

tax

liability

of

the

private

respondent was still being questioned

and therefore could not be set-of
against the refund, granted private
respondent's

motion.

The

private

respondent questioned the assessed

tax based on Article 186 of the Tax
Code, contending that cement was
adjudged

mineral

manufactured

and

product;

not

and

thusly

they were not liable for their alleged

tax deficiency. Thereby, petitioner filed
this petition for review.
Issue: Whether or not assessment of
taxes can be enforced even if there is
a case contesting it.
argument

assessment

cannot

that
as

yet

the
be

enforced because it is still being

loses

sight

of

the

urgency of the need to collect

taxes as "the lifeblood of the
government." If the payment of
taxes

could

be

postponed

by

simply questioning their validity,

the machinery of the state would
grind to a halt and all government
functions would be paralyzed. That
is

the

reason

why,

save

for

the

exception in RA 1125 , the Tax Code

provides

that

Facts: Petitioner

Municipality

of

Makati expropriated a portion of land

owned

by

private

respondents,

Admiral Finance Creditors Consortium,

Inc. After proceedings, the RTC of
Makati determined the cost of the said
land which the petitioner must pay to
the private respondents amounting to
P5,291,666.00 minus the advanced
payment of P338,160.00. It issued the
corresponding

writ

of

execution

accompanied

with

writ

of

garnishment of funds of the petitioner

which was deposited in PNB. However,
such order was opposed by petitioner
through a motion for reconsideration,

Held: The

contested

MUNICIPAL OF MAKATI vs. CA et.al

GR No. 89898 Oct. 1, 1990

injunction

is

not

available to restrain collection of tax.

contending that its funds at the PNB

could neither be garnished nor levied
upon execution, for to do so would
result in the disbursement of public
funds without the proper appropriation
required under the law, citing the case
of

Republic

Palacio.

The

of

the

RTC

Philippines

dismissed

v.

such

motion, which was appealed to the

Court of Appeals; the latter affirmed
said dismissal and petitioner now filed
this

petition

for

review.

Issue: Whether or not funds of the

Municipality of Makati are exempt from
garnishment and levy upon execution.
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Held: It is petitioner's main contention

within the bounds of fair play and

that the orders of respondent RTC

justice.

judge involved the net amount of

P4,965,506.45,

wherein

the

funds

garnished by respondent sherif are in

excess

of

P99,743.94,

public

fund

and

which

thereby

LIFEBLOOD DOCTRINE

> Taxes are the lifeblood of the

nation

> Without revenue raised from

taxation, the government will
not
survive,
resulting
in
detriment to society. Without
taxes, the government would be
paralyzed for lack of motive
power to activate and operate
it. (CIR vs. ALGUE)

> Taxes are the lifeblood of the

government and there prompt
and certain availability is an
imperious need.

> Taxes are the lifeblood of the

nation
through
which
the
agencies of the government
continue to operate and with
which the state efects its
functions for the benefit of its
constituents

are
are

exempted from execution without

the proper appropriation required
under the law. There is merit in
this

contention.

jurisdiction,

In

well-settled

this
is

the

rule that public funds are not

subject to levy and execution,
unless otherwise provided for by
statute.

Municipal

revenues

derived from taxes, licenses and

market

fees,

and

which

are

intended primarily and exclusively

for the purpose of financing the
governmental

activities

and

functions of the municipality, are

exempt from execution. Absent a
showing that the municipal council of
Makati

has

passed

an

ordinance

appropriating the said amount from its

public funds deposited in their PNB
account, no levy under execution may
be

validly

efected.

However,

this

court orders petitioner to pay for the

said land which has been in their use
already. This Court will not condone
petitioner's blatant refusal to settle its
legal

obligation

arising

ILLUSTRATIONS OF THE LIFEBLOOD

THEORY
1) Collection of the taxes may not
be enjoined by injunction
2) Taxes could not be the subject
of compensation or set of
3) A valid tax may result in
destruction of the taxpayers
property
4) Taxation is an unlimited and
plenary power

from

expropriation of land they are already

enjoying.

The

State's

power

of

eminent domain should be exercised

CIR vs. ALGUE, Inc., et. al.,

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L-28896, Feb. 17, 1988

Facts: The Philippine Sugar Estate
Development
Company
(PSEDC). Appointed Algue Inc. as its
agent. Algue received a commission of
125,000.00 and it was from their
commission that it paid organizers of
VOICP 75,000.00 in proportional fees.
He received an assessment from the
CIR. He filed a letter of protest or
reconsideration. The CIR contends that
the claimed deduction was properly
disallowed because it was not an
ordinary, reasonable or necessary
expense.
Issue:

Is

the

CIR

correct?

HELD: No. taxes are the lifeblood

of the government and should be
collected
without
unnecessary
hindrance. Every person who is
able to pay must contribute his
share in the running of the
government. The government for
its part is expected to respond in
the
form
of
tangible
and
intangible benefits intended to
improve the lives of the people
and enhance their moral and
material values. This symbiotic
relationship is the rationale of
taxation and should dispel the
erroneous notion that is an
arbitrary method of exaction by
those in the seat of power.
On the other hand, such collection
should be made in accordance with
law as any arbitrariness will negate
the very reason for government itself.

BPI Family Savings Bank vs. CA,

et. al.,
GR No. 122480, Apr. 12, 2000

Facts: Petitioner
banks
annual
corporate income tax return for 1989
showed that it sufered a loss of
P8,286,960, and that it had a total
refundable
amount
of
P297,492
inclusive of P112,491 being claimed
astax refund in the present case.
However, petitioner declared in its
1989 income tax return as a tax
credit in the succeeding taxable year.
On October 11, 1991, petitioner bank
filed a written claim for refund of
P112,491 with the BIR alleging that it
did not apply the 1989 refundable
amount of P297,492 as tax credit to its
1990 annual corporate income tax
return or either tax liabilities due to
business losses it incurred for the
same year. Without waiting for
respondent CIRs action in its claim for
refund, petitioner filed a petition for
review
with
the
CTA.
CTA dismissed the petition on the
ground that petitioner bank failed to
present
as
evidence
its
1990
annual income tax return to prove that
it had not yet credited the amount of
P297,422, inclusive of P112,491 which
is the subject of the present
controversy to its 1990 tax liability.
Since
petitioner declared in
its
1989 income tax return that it would
apply the excess withholding tax
as tax credit for the following year, the
tax court presumed that it did so.
Petitioner failed to overcome this
presumption because it did not
present its 1990 tax return which
would have shown that the amount
was not applied as a tax credit. Hence,
it was concluded that petition was not
entitled to a tax refund. The CA
affirmed said decision of the CTA.
Issue: Whether or not petitioner is
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entitled to a tax refund of P112,491

representing creditable withholding
tax
paid
for
1989.
Held: The petition is meritorious. As a
rule, the factual findings on the
appellate court are binding on the SC.
This rule, however, does not apply
where, inter alia, the judgment is
premised on a misapprehension of
facts or when the appellate court
failed to notice certain relevant facts
which if considered would justify a
diferent conclusion. This case is one
such exception.
Strict procedural rules generally frown
up the submission of the return the
trial. R.A. 1125, the law creating the
CTA,
however,
specifically
provides the proceedings before
it shall not be governed strictly
by
the
technical
rules
of
evidence.
The paramount considerations
remains the ascertainment of
truth. Verily, the quest for orderly
presentation of issues is not an
absolute. It should not bar courts
from considering undisputed facts
to arrive at a just determination
of
a
controversy.
While tax refunds are in the nature
of the exceptions and are to the
construct strictissimi juris against
the claimant, under the facts of
this
case,
petitioner
has
established
its
claim.
Substantial justice equity, and fair play
are on the side of petitioner.
Technicalities and legalisms, however,
exalted, should not be misused by the
government to keep money not
belonging to it and thereby enrich
would be better by allowing to appeal.

>PRINCIPLES OF A SOUND TAX

SYSTEM<
1. Fiscal Adequacy
- VIOLATION VALID
> Sources of revenue should be
sufficient to meet the demands
of public expenditure
> Revenues should be elastic or
capable
of
expanding
or
contracting
annually
in
response to variations in public
expenditure
>Elasticity may be obtained
without creating annually any
new taxes or any new tax
machinery
but
merely
by
changes in the rates applicable
to existing taxes

> Even if a tax law violates the

principle of Fiscal Adequacy , in
other words, the proceeds may
not be sufficient to satisfy the
needs of the government, still
the tax law is valid.

2. THEORETICAL JUSTICE
- VIOLATION INVALID
> This principle mandates that
taxes must be just, reasonable
and fair
Taxation shall be uniform
and equitable

> Equitable taxation has been

mandated by our constitution,
as if taxes are unjust and
unreasonable then they are not
equitable, thus invalid.
> The tax burden should be in
proportion to the taxpayers
ability to pay (ABILITY TO PAY
PRINCIPLE).

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3. ADMINISTRATIVE
FEASIBILITY
- VIOLATION VALID
> The tax law must be capable
of
efective
or
efficient
enforcement
> Tax laws should be capable of
convenient, just and efective
administration

> Tax laws should close-up the

loopholes for tax evasion and
deter
unscrupulous
officials
from committing fraud
> There is no law that requires
compliance with this principle,
so even if the tax law violates
this principle; such tax law is
valid.
>SCOPE OF TAXATION<
In the absence of limitations
provided by the constitution,
the power to tax is essentially
unlimited,
plenary,
comprehensive,
farreaching,
and
supreme.
Taxation compasses every trade
or occupation, every object or
industry
or
possession
of
property. It levies a burden
which, in case of failure to
discharge,
seizure
or
confiscation of property may be
enforced, subject to due process
of
law.
1. Unlimited
2. Plenary
3. Comprehensive
4. Far-Reaching
5. Supreme
>LIMITATIONS OF
TAXATION<

Inherent Limitations
1. It must be imposed for a public
purpose.

2. If delegated either to the

President or to a L.G.U., it
should be validly delegated.
3. It is limited to the territorial
jurisdiction
of
the
taxing
authority.
4. Government
exempted.

entities

are

5. International
comity
is
recognized i.e. property of
foreign sovereigns are not
subject to tax.
Constitutional Limitations
Indirect
a) Due process clause
b) Equal protection clause
c) Freedom of the press
d) Religious freedom
e) Non-impairment clause
f) Law-making process
1. One-subject One-title Rule
2. 3 readings on 3 separate
days Rule except when there is a
Certificate of Emergency
3. Distribution of copies 3 days
before the 3rd reading.
g) Presidential
power to grant
reprieves, commutations and pardons,
and remit fines and forfeitures after
conviction by final judgment.
Direct
a) Revenue bill must originate
exclusively in H.R. but the Senate may
propose with amendments.
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b) Non-imprisonment for non-payment

of poll tax.
c) Taxation
equitable.

shall

be

uniform

and

d) Congress shall evolve a progressive

system of taxation.
e) Tax exemption of charitable
institutions, churches and personages
or convents appurtenant thereto,
mosques, non-profit cemeteries, and
all lands, buildings and improvements
ADE (actually, directly , exclusively)
used for charitable, religious, and
educational purposes.
f) Tax exemption of all revenues and
assets used ADE for educational
purposes of
1.
Non-profit
educational institutions.

Phil. Bank of Communications vs.

CIR., et. al., GR No 119024, Jan.
28, 1999

non-stock

2.
Proprietary or cooperative
educational institutions subject to
limitations provided by law including
a) restriction on dividends
b) provisions for re-investments.
g)
Tax
exemption
of
grants,
endowments,
donations
or
contributions ADE for educational
purposes,
subject
to
conditions
prescribed by law.
h) No tax exemption without the
concurrence of a majority of all
members of Congress.
i) SC power to review judgments or
orders of lower courts in all cases
involving Legality of any tax. Impost
or toll, Legality of any penalty imposed
in relation thereto.

Facts: Petitioner Philippine Bank of

Communications
(PBCom),
a
commercial
banking
corp.
duly
organized under Philippine Laws, filed
its quarterly income tax returns for the
1st and 2nd quarters of 1985, reported
profits, and paid the total income
tax of P5,016,954.00. The taxes due
were settled by applying PBComs tax
credit memos and accordingly, the BIR
issued
tax
Debit
Memo.
Subsequently,
however,
PBCom
sufered losses so that when it filed its
Annual Income Tax Returns for the
year-ended December 31, 1985, it
declared a net loss of P25,317,228.00,
thereby
showing
no income
tax liability. For the succeeding year,
ending December 31, 1986, it likewise
declared no tax payable for the year.
But during these two years, PBCom
earned rental income from leased
properties. The lessees withheld and
remitted to the BIR withholding
creditable taxes in 1985 and 1986.
On
August
7,
1987,
petitioner
requested the CIR, among others, for a
tax
credit of
P5,016,954.00
representing the overpayment of taxes
in the 1st and 2nd quarters of 1985.
Thereafter on July 25, 1988, petitioner
filed on claim for refund of creditable
taxes withheld by their lessees
from property rentals in 1985 for
P282,795.50
and
in
1986
for
234,077.69.
Pending the investigation of the
respondent CIR, petitioner instituted a
Petition for Review on November 18,
1988
before
the
CTA.
On May 20, 1993, the CTA denied the
request
of
petitioner
for
a tax
refund or credit in the sum of
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P5,299,849.95 on the ground that it

was
field
beyond
the
2-year
reglementary period provided for by
law. The petitioners claim for refund in
1986 amounting to P234,077.69 was
likewise denied on the assumption
that it was automatically credited by
PBCom against its tax payment in the
succeeding
year.
Issue: Whether or not the need to
signify whether a tax payer intends to
avail of a tax refund or a tax should be
made
on
its
annual
corporate
adjustment
return.
Held: Sec. 69 of 1977 NIRC (now Sec.
76 of 1997 NIRC) provides that any
excess of the total quarterly payments
over the actual income tax computed
in the adjustment or final corporate
income tax
return,
shall
either:
a.) be refunded to the corporation, or
b.) may be credited against the
estimated
quarterly income
taxliabilities or the quarters of the
succeeding
taxable
year.
The corporation must signify in its
annual corporate adjustment return
(by marking the option box provided in
the BIR form) its intention, whether to
request for a refund or claim for an
automatic tax
credit for
the
succeeding taxable year. To ease the
administration of tax collection, these
remedies are in the alternative, and
the choice of one precludes the other.
Sison vs. Ancheta, GR No. 59431,
Jul. 25, 1984
Facts: Section 1 of BP Blg 135
amended the Tax Code and petitioner
Antero M. Sison, as taxpayer, alleges
that
"he
would
be
unduly
discriminated
against
by
the
imposition of higher rates of tax upon
his income arising from the exercise of
his profession vis-a-vis those which are
imposed upon fixed income or salaried

individual taxpayers. He characterizes

said provision as arbitrary amounting
to class legislation, oppressive and
capricious in character. It therefore
violates both the equal protection and
due
process
clauses
of
the
Constitution as well asof the rule
requiring
uniformity
in
taxation.
Issue: Whether or not the assailed
provision violates the equal protection
and due process clauses of the
Constitution while also violating the
rule that taxes must be uniform and
equitable.
Held: The petition is without merit.
On due process - it is undoubted that
it may be invoked where a taxing
statute is so arbitrary that it finds no
support in the Constitution. An obvious
example is where it can be shown to
amount to the confiscation of property
from abuse of power. Petitioner alleges
arbitrariness but his mere allegation
does not suffice and there must be a
factual
foundation
of
such
unconsitutional
taint.
On equal protection - it suffices that
the laws operate equally and uniformly
on
all
persons
under
similar
circumstances, both in the privileges
conferred and the liabilities imposed.
On the matter that the rule of taxation
shall be uniform and equitable - this
requirement is met when the tax
operates with the same force and
efect in every place where the subject
may be found." Also, :the rule of
uniformity does not call for perfect
uniformity or perfect equality, because
this is hardly unattainable." When the
problem of classification became of
issue, the Court said: "Equality and
uniformity in taxation means that all
taxable articles or kinds of property of
the same class shall be taxed the
same rate. The taxing power has the
authority to make reasonable and
natural classifications for purposes of
taxation..." As provided by this Court,
where "the diferentiation" complained
of "conforms to the practical dictates
of justice and equity" it "is not
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discriminatory within the meaning of

this clause and is therefore uniform."

As a general rule, there were no

takers so that there can be no
reasonable
basis
for
the
conclusion that these properties
are comparable.

Reyes vs. Almanzor, GR Nos. L49839-46,

Apr. 26, 1991
FACTS: Petitioner are owners of
parcels of land leased to tenants. RA
6359 was enacted prohibiting for one
year an increase in monthly rentals of
dwelling units and said Act also
disallowed ejectment of lessees upon
the expiration of the usual period of
lease.
City
assessor
of
Manila
assessed the value of petitioners
property based on the schedule of
market values duly reviewed by the
Secretary of Finance.
The revision
entailed an increase to the tax rates
and petitioners averred that the
reassessment imposed upon them
greatly exceeded the annual income
derived from their properties.
ISSUE: Whether or not income
approach is the method to be used in
the tax assessment and not the
comparable sales approach.
RULING: By no stretch of the
imagination can the market value of
properties covered by PD 20 be
equated with the market value of
properties not so covered. In the case
at bar, not even factors determinant of
the
assessed
value
of
subject
properties under the comparable sales
approach
were
presented
by
respondent namely:
1. That the sale must represent a
bonafide
arms
length
transaction between a willing
seller and a willing buyer
2. The
property
must
comparable property.

be

Taxes
are
lifeblood
of
government, however, such collection
should be made in accordance with
the law and therefore necessary to
reconcile conflicting interests of the
authorities so that the real purpose of
taxation, promotion of the welfare of
common good can be achieved.
>ASPECTS OF TAXATION<
1. Levy pertains to the passage
of tax laws and tax ordinances
to legislature.
2. Assessment refers to the
appraisal and valuation
process of the subject or object
of taxation to arrive at total
amount of collectible tax.
3. Payment or Collection involves
the efective administrative
implementation of obtaining
payment of tax from the
taxpayer.
LEVY or IMPOSITION
enactment of tax laws
legislative in character
NOTES:

> It is inherent in the power to

tax that the State is free to
select the object of taxation

> The power of the legislature

to impose tax includes the
power
1) what to tax
2) whom to tax
3) how much to tax

BAGATSING vs. RAMIREZ

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> What cannot be delegated is

the legislative enactment of a
tax measure but as regards to
the
administrative
implementation of a tax law
that can be delegated.

> The collection may be

entrusted to a private corporation.

> The rule that the power of

taxation cannot be delegated
does
not
apply
to
the
administrative implementation
of a tax law
> There is no violation because
what is delegated or entrusted
is the collection and not the
enactment of such laws

>The issuance of regulations or

circulars by the BIR or the
Secretary of Finance should not
go beyond the scope of the tax
measure.

Tan vs. Del Rosario, Jr., et, al.,

GR No. 109289, Oct. 3, 1994
Facts:
Petitioners challenge the
constitutionality of RA 7496 or the
simplified income taxation scheme
(SNIT) under Arts (26) and (28) and III
(1). The SNIT contained changes in the
tax schedules and diferent treatment
in the professionals which petitioners
assail as unconstitutional for being
isolative of the equal protection clause
in
the
constitution.
Issue: is the contention meritorious?
Ruling: No. uniformity of taxation,
like the hindered concept of equal
protection, merely require that all
subjects or objects of taxation
similarly situated are to be
treated alike both privileges and
liabilities. Uniformity, does not

offend classification as long as it

rest on substantial distinctions, it
is germane to the purpose of the
law. It is not limited to existing
only and must apply equally to all
members of the same class.
The legislative intent is
to increasingly shift the income
tax system towards the scheduled
approach in taxation of individual
taxpayers
and
maintain
the
present
global
treatment
on
taxable
corporations.
This
classification is neither arbitrary
nor inappropriate.
>CLASSIFICATION OF TAXES<
AS TO SUBJECT MATTER OR OBJECT
1. Personal, poll or capitation tax
Tax of a fixed amount imposed on
persons residing within a specified
territory, whether citizens or not,
without regard to their property or the
occupation or business in which they
may be engaged, i.e. community tax.
2. Property tax
Tax imposed on property, real or
personal, in proportion to its value or
in accordance with some other
reasonable method of apportionment.
3. Excise tax
A
charge
impose
upon
the
performance of an act, the enjoyment
of privilege, or the engaging in an
occupation.
AS TO PURPOSE
General/fiscal revenue tax is that
imposed for the purpose of raising
public funds for the service of the
government.
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[LSPU COLLEGE OF
LAW]

[ TAXATION LAW]

A special or regulatory tax is

imposed primarily for the regulation of
useful or non-useful occupation or
enterprises and secondarily only for
the purpose of raising public funds.

assessment other than the listing or

classification of the objects to be
taxed.

AS TO WHO BEARS THE BURDEN

An ad valorem tax is a fixed

proportion of the value of the property
with respect to which the tax is
assessed. It requires the intervention
of assessors or appraisers to estimate
the value of such property before due
from
each
taxpayer
can
be
determined.

1.

Direct tax

A direct tax is demanded from the

person who also shoul,ders the burden
of the tax. It is a tax which the
taxpayer is directly or primarily liable
and which he or she cannot shift to
another.
2.

Indirect tax

AS TO THE SCOPE OF THE TAX

Proportional tax

Tax based on a fixed percentage of

the amount of the property receipts or
other basis to be taxed. Example: real
estate tax.
2.

Progressive or graduated tax

Tax the rate of which increases as

the tax base or bracket increases.
Digressive tax rate: progressive
rate stops at a certain point.
Progression halts at a particular stage.

1. National tax
A national tax is imposed by the
national government.
2. Local tax
A local tax is imposed by the
municipal corporations or local
government units (LGUs).
DETERMINATION

AS TO GRADUATION OR RATE
1.

An indirect tax is demanded from a

person in the expectation and
intention that he or she shall
indemnify himself or herself at the
expense of another, falling finally
upon the ultimate purchaser or
consumer.
A tax which the
taxpayer can shift to another.

AS TO THE
AMOUNT

2. Ad valorem tax

OF

3.

Regressive tax

Tax the rate of which decreases as

the tax base or bracket increases.
There is no such tax in the Philippines.
>DISTINGUISHED FROM OTHER
EXACTIONS<
TAX distinguished from LICENSE

1. Specific tax
A specific tax is a tax of a fixed
amount imposed by the head or
number or by some other standard of
weight or measurement. It requires no

SOURC
ES
PURPO

TAX
Exercise of
taxing power

Raise Revenue
xviiixxvi

LICENSE
Emanate
from the
police
power of
state
Regulation
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[LSPU COLLEGE OF
LAW]
SE
OBJECT

[ TAXATION LAW]

Right to
exercise a
privilege
AMOUN
Only
T
necessary
to carry out
regulation
TAX distinguished from TOLL
KIND OF
DEMAND
PURPOS
E
AMOUNT

Persons,
property
and
privilege
No Limit

TAX
Demand of
sovereignty
Support of
government
No limit
depends on
need of the
government

TOLL
Demand of
ownership
Collection for
the property
or
improvement
Fair return of
the cost of
property or
improvement

SOUR
CES

Law, Legal
obligation
Personal
Generally not
subject to
compensation/
set-of
Imprisonment
is sanction for
non-payment

Based on
contract
Assignable
May be subject
of
compensation/
set-of
No
imprisonment
for nonpayment

TAX distinguished from SPECIAL

ASSESSMENT
TAX
IMPOSED
ON
WHY
IMPOSED

Persons,
properties,
etc.
Regardless
of public
improvemen
ts

PURPOSE

Support of
government

WHEN
IMPOSED

Regular
exaction

BASIS

Necessity

SPECIAL
ASSESSME
NT
Only land
Public
improvemen
t that
benefits the
land
Contribution
to cost of
public
improvemen
ts
Exceptional
as to time
and locality
Benefits
obtained

TAX distinguished from DEBT or

an ORDINARY OBLIGATION
TAX

DEBT
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