Fundamentals of Taxation Theories

Questions and Answers

How should laws granting tax exemption be construed in cases of doubt?

Strictly against the government and the taxpayer

Liberally in favor of the government and strictly against the taxpayer

Strictly against the government and liberally in favor of the taxpayer (correct)

Liberally in favor of the government and the taxpayer

Which of the following is not a Constitutional Limitation on the power of taxation?

Exemption of the government

Non-diversification of tax collections

Free worship clause (correct)

Due process of law in taxation

Which of the following is not an inherent limitation of the power of taxation?

Public purpose test

Veto power of the president (correct)

International comity

Territoriality

What is the composition of the Chief Officials of the BIR?

1 Commissioner, 2 Deputy Commissioners and 2 Assistant Commissioners Signup and view all the answers

Which statement about the power of taxation is NOT correct?

The State can have the power of taxation only if the Constitution expressly gives it the power to tax Signup and view all the answers

What can the Commissioner of Internal Revenue do?

All are true Signup and view all the answers

Which of the following is a Constitutional Limitation on the power of taxation?

Non-diversification of tax collections Signup and view all the answers

What is the main purpose of taxation?

To raise revenue or to regulate certain activities within the State Signup and view all the answers

Which theory in taxation holds that a government cannot function without taxes, leading to its potential destruction?

Lifeblood theory Signup and view all the answers

Which of the following statements is incorrect regarding the power of taxation?

The money contributed as tax remains private property. Signup and view all the answers

Among the Fundamental Powers of the State, which statement is not true?

They can be abolished by the Constitution. Signup and view all the answers

Regarding the significance of taxes, which statements are correct?

Both statements are correct. Signup and view all the answers

Which option is not considered a secondary purpose of taxation?

Funding of military operations. Signup and view all the answers

In cases of doubt, how are tax statutes construed?

Liberal interpretation favoring the taxpayer. Signup and view all the answers

What is the primary purpose of taxation?

Raising revenue for government operations. Signup and view all the answers

Which of the following powers is typically considered a method through which a state can interfere with private property rights?

Taxation. Signup and view all the answers

Study Notes

Taxation Theories

Lifeblood theory posits that without taxes, a government lacks the power to function, potentially leading to its destruction.
Other taxation theories include the Power to Destroy theory, Sumptuary theory, and Symbiotic doctrine.

Taxation Authority and Limits

Government, its political subdivisions, and public utilities possess the power to impose taxes.
Generally, there are no limitations on the amount of tax imposed.
Collected taxes become part of public funds.
Taxation power is subject to constitutional limitations.

Fundamental Powers of the State

The three fundamental powers of the State can interfere with private property rights and are inherent upon its emergence.
Each power presupposes compensation to inhabitants, but they cannot be abolished by the Constitution.

Importance of Taxes

Taxes are vital for government function and should be calculated efficiently.
Legislative measures aim to ensure timely tax payment and collection.

Purposes of Taxation

Primary purpose of taxation is revenue generation.
Secondary purposes include reducing social inequality, encouraging economic growth through incentives, and promoting general welfare.
Protecting foreign interests is not a recognized secondary purpose of taxation.

Interpretation of Tax Laws

Tax statutes are construed strictly against the government and liberally in favor of the taxpayer in cases of doubt.
Laws granting tax exemptions are interpreted liberally in favor of the government and strictly against the taxpayer.

Constitutional Limitations

Due process in taxation is a constitutional limitation.
Non-diversification of tax collections, government exemption, and free worship clause are not constitutional limitations affecting taxation.

Inherent Limitations of Taxation Power

Territoriality and public purpose tests are inherent limitations of the power of taxation.
Veto power of the president and international comity are not inherent limitations.

Bureau of Internal Revenue Organization

Chief officials of the Bureau of Internal Revenue (BIR) comprise 1 Commissioner and 4 Deputy Commissioners.

Correctness of Taxation Statements

The state’s power of taxation is not limitless; it is governed by constitutional provisions, which serve as limitations rather than grants of authority.
Taxes can regulate activities and raise revenue but cannot tax arbitrarily.

Commissioner of Internal Revenue Powers

The Commissioner may close businesses without due process if substantial proof of tax evasion is present.
The Commissioner has authority to arrest taxpayers for violating tax code provisions.
The Commissioner can seize excisable articles with unpaid excise taxes.
All statements regarding the Commissioner’s powers are considered true.

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Description

Test your understanding of taxation theories, including the power to destroy, sumptuary, lifeblood, and symbiotic doctrine. Identify the correct statements and incorrect assertions about taxation powers and limits.