Taxation

TAXATION, IN GENERAL

A. Definition of taxation *1. Taxation, definition or concept. a. The inherent power of the sovereign 1) Exercised through the legislature to impose burdens b. To impose burdens 1) Upon subjects and objects 2) Within its jurisdiction c. For the purpose of raising revenues d. To carry out the legitimate objects of government. NOTES AND COMMENT: a. Alternative definition. Taxation is the power vested in the legislature to impose burdens or charge upon persons and property for the purpose of raising revenue for public purposes. ( Malcom, p351-353) B. Nature of taxation

***1. Two- fold nature of taxation or nature of the power of taxation or description of the power of taxation: a. Inherent power b. Legislative power ***2. Power of taxation is an inherent power. Taxation is an inherent power because it is an attribute of sovereignty a. Basis: The basis of the power of taxation being an inherent power is the lifeblood theory of taxation which posits that the very existence of the state is dependent upon tax revenues collected. Without taxes the states would not be able to perform the functions for which has been organized. b. Manifestation: 1. Imposition even in the absence of constitutional grant empowering a state to collect taxes. 2. State’s right to select objects and subjects of taxation. 3. No injuction rule. As a general rule courts should not issue injunctive writs to enjoin collection of tax otherwise this would restrict the amount of taxes that may be collect to finance the activities of government. ***3. Taxation is a high prerogative of sovereignty. The power of taxation is essential and inherent attribute of sovereignty, belonging as a matter of right to every independent government without being expressly granted by the people. (Pepsi Cola Bottling Company of the Philippines, Inc v. Municipality of Tanauan, Leyte, 69 SCRA 460)

It is an attribute of sovereignty which emanates from necessity upon which the very existence of the...