Taxation and State Powers Overview

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Questions and Answers

Who primarily has the authority to levy taxes?

The Executive

The Judiciary

The Legislature (correct)

The Public

What happens if an individual fails to pay their taxes?

They can be imprisoned

The government can impose fines

The government can seize property (correct)

Their voting rights are revoked

What is the nature of tax payment?

Generally payable in money (correct)

Payable in kind

Bartered goods

Deferred payments

Which of the following is NOT a purpose of levying taxes?

Personal gain Signup and view all the answers

Which concept describes that taxes are essential for the government's functioning?

Taxes as the lifeblood of the government Signup and view all the answers

What is the rule of 'No Estoppel' against the Government?

Government can collect taxes despite past mistakes Signup and view all the answers

What does the term 'Plenary' allow in tax regulation?

Give the BIR broad powers to ensure tax collection Signup and view all the answers

Which authority regulates the collection of taxes in the Philippines?

Bureau of Internal Revenue (BIR) Signup and view all the answers

What is one inherent limitation to the power of taxation?

Public purposes only Signup and view all the answers

What is the primary source of government revenue?

Taxation Signup and view all the answers

Which group is subject to Philippine income tax?

Resident citizens and non-resident citizens Signup and view all the answers

What would happen without taxation?

Other inherent governmental powers would be paralyzed Signup and view all the answers

What entity must grant tax exemption according to Philippine laws?

Majority of Congress Signup and view all the answers

What is the primary purpose of raising revenue through taxation?

To promote general welfare Signup and view all the answers

Which of the following is NOT a governmental function?

For-profit enterprises Signup and view all the answers

What type of tax can Congress impose on cigarettes?

Prohibitive tax Signup and view all the answers

What is required for delegation of the power of taxation to be constitutionally valid?

Complete and set forth standards Signup and view all the answers

What limits the tax power of the government?

The territorial jurisdiction of the State Signup and view all the answers

Which of the following services is typically exempt from taxation?

Public education provided by schools Signup and view all the answers

What do citizens contribute to the relationship with the state?

Taxes Signup and view all the answers

What governs taxation related to international relations?

International comity Signup and view all the answers

Which entity is often responsible for proprietary functions?

Government-owned corporations Signup and view all the answers

What may NO tax law be enacted to do?

Raise revenue for private purposes Signup and view all the answers

Who are non-resident citizens in the Philippine taxation context?

Filipino citizens living abroad without domicile Signup and view all the answers

Study Notes

Taxation

Enforced contribution to cover government costs
Imposed by the State
Levied by the Legislature
Generally payable in money
Proportionate tax based on taxpayer's ability to pay
Can be levied on persons, property, activities
Purpose is for public purpose

Inherent Powers of the State

Police Power, Eminent Domain, Taxation
Police Power protects citizens' welfare
Eminent Domain is taking property for public use
Taxation supports the government
Can be exercised without the Constitution

Attributes of Sovereignty

Effective government
Primarily exercised by the Legislature
Police power regulates liberty and property
Eminent domain and taxation affect only property rights
Only government can exercise police power and taxation
Eminent domain presupposes equivalent compensation

Taxation Rules

Rule of 'No Estoppel' against the Government; Government collects taxes despite past mistakes.
Taxes should be collected without unnecessary hindrance.
Collection of taxes cannot be stopped by injunction except by Court of Tax Appeals.
Taxes are the lifeblood of the government
Taxes cannot be used as compensation or set-off

Power of Taxation

Limited power
Government has broad authority regarding taxation
Non-payment of taxes can result in government seizure of property
Described as the "power to destroy"
Necessity theory states that the government needs funds to pay expenses
Taxes are necessary to preserve state sovereignty
Government provides an army, navy, civil servants, and enjoyment of the citizenry (public improvements) through taxes

Scope of Taxation

Comprehensive and unlimited
Plenary power allows the Bureau of Internal Revenue (BIR) to ensure tax collection
Government is the supreme power in tax matters
The Constitution is the most fundamental law of the land
Statutes, passed by Congress, are relevant to taxation
The National Internal Revenue Code (NIRC) regulates tax collection in the Philippines
Revenue Regulations are issued by the Department of Finance
BIR issuances (Revenue Memorandum Circulars, Revenue Memorandum Orders, and Revenue Administrative Orders) provide guidelines for tax administration

Limitations of Taxation

Inherent limitations: Only for public purposes
International comity governs taxation subject to international relations
Legislative nature of taxation: Inherently legislative
Delegation must be constitutionally valid and set forth standards.
Delegation can occur in the power to value property, assess and collect taxes, and details like computation, appraisal, and adjustment

Residence and Tax Implications

Resident Citizens: Individuals domiciled in the Philippines
Tax on worldwide income
Non-Resident Citizens: Filipino citizens without domicile in the Philippines
Tax on Philippine source income
Resident Aliens: Foreign individuals domiciled in the Philippines
Tax on Philippine source income

Philippine Income Tax

Levied on resident citizens and non-resident citizens
Levied on worldwide income
Constitutional limitations: Due process of law, equal protection of law, etc.

Tax Exemptions

Religious, charitable, and educational entities are exempt from property tax
Public money cannot be appropriated for religion
Granting tax exemption requires a majority vote in Congress
Supreme Court has jurisdiction to determine the legality of taxes
Tax collection is treated as general funds of the government
Compensation involved in other powers is the taxes paid

Power to Tax is an Attribute of Sovereignty

Strongest governmental power, but not without limitations
Affects property rights
Congress can impose a prohibitive tax on cigarettes
Contribution from persons and properties is enforced
State-imposed sovereignty
Government is responsible for the levied money
Citizens should pay taxes based on the benefits they receive
Taxes are a contribution in the reciprocal relationship between the state and its citizens
This idea emphasizes the reciprocal relationship between the state and its citizens
Taxpayers are reluctant to surrender part of their hard-earned income
Everyone must contribute to the running of the government
Government is expected to provide moral and material values to the people
Taxation is the rationale for this symbiotic relationship

Importance of Taxation

Primary source of government revenue
Without taxes, the other inherent powers would be paralyzed
Without revenue, there can be no government
Without government, there can be no civilization

Purposes of Taxation

Fundraising (Revenue/Fiscal)
Promotion of general welfare (Regulatory/Sumptuary/Compensation)
Reducing social inequality

Territorial Jurisdiction

Tax power is limited to the territorial jurisdiction of the State
No tax law may be enacted to raise revenue for private purposes
Public welfare ultimately benefits from the promotion of the direct object of expenditure
International comity: Respect for each other's tax rules

Governmental Functions

Activities undertaken by the government to serve the public interest
Provide services to the public such as education, healthcare, and public safety
Public schools, as a government function, are exempt from taxation

Proprietary Functions

Activities undertaken by the government to generate profit or revenue
Generally subject to taxation unless specifically exempted by law
Government-owned corporations or enterprises are often responsible for proprietary function
Government-owned utility companies are typically subject to taxation
GOCCs are subject to tax (Government-Owned and Controlled Corporations)
GSIS (Government Service Insurance System) is a government-owned corporation.

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Description

This quiz explores the concepts of taxation, inherent state powers, and attributes of sovereignty. It covers the purposes, rules, and implications of taxation within a governmental framework. Test your understanding of how these elements interact in public governance.