Fundamentals of Income Taxation
Income Taxation (University of Mindanao)
Taxation
Power to pay necessary expenses of the government
Process or act to raise revenues/money for public purposes
Inherent power of the sovereign
To impose burdens
To carry out legitimate objectives of the government
Purposes of Taxation
Revenue objective
Non-revenue objective
Sumptuary/regulatory purposes
Compensatory objective
Basis of Taxation
Necessity theory
Compensation theory
Ability to pay theory
Nature of Taxation
It is inherent in sovereignty
It is legislative in character
It is subject to limitations
Inherent power (Basis: lifeblood theory)
Legislative power (Inherent Powers of the state: Police power, Eminent
Domain, Taxation Power)
Inherent limitations
Levied for public purpose
Non-delegation of power to tax
Exemption of government entities to tax
Taxation laws are subject to international comity
Situs or territoriality – situs of taxation is the state or country
Constitutional limitations
Due process of law
Equal protection of the law
Freedom of religious profession and worship
Non-impairment of contracts
No imprisonment for non-payment of tax
Revenue, appropriation, and tariff bills to originate from the House
of Representatives
Uniformity and equality
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