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Taxation

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  • March 2012
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TAXATION LAW

I. General Principles

POWER OF TAXATION
TAXATION – power by which the sovereign through its law-making body raises revenue to defray the necessary expenses of government from among those who in some measure are privileged to enjoy its benefits and must bear its burdens.

Two Fold Nature of the Power of Taxation

1. It is an inherent attribute of sovereignty
2. It is legislative in character

Extent of Taxing Power

Subject to constitutional and inherent restrictions, the power of taxation is regarded as comprehensive, unlimited, plenary and supreme.

Scope of Legislative Taxing Power

1. Amount or rate of tax
2. Apportionment of the tax
3. Kind of tax
4. Method of collection
5. Purpose/s of its levy, provided it is for public purpose
6. Subject to be taxed, provided it is within its jurisdiction 7. Situs of taxation

TAXES – enforced proportional contributions from the persons and property levied by the law-making body of the State by virtue of its sovereignty in support of government and for public needs.

Characteristics of Taxes
1. forced charge;
2. pecuniary burden payable in money;
3. levied by the legislature;
4. assessed with some reasonable rule of apportionment; (see theoretical justice) 5. imposed by the State within its jurisdiction;

6. levied for a public purpose.

Requisites of A Valid Tax
1. should be for a public purpose
2. the rule of taxation shall be uniform
3. that either the person or property taxed be within the jurisdiction of the taxing authority 4. that the assessment and collection of certain kinds of taxes guarantees against injustice to individuals, especially by way of notice and opportunity for hearing be provided 5. the tax must not impinge on the inherent and Constitutional limitations on the power of taxation

Theories and Bases of Taxation

1. Lifeblood Theory
Taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for...