TA X AT I ON .

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I. TAXATION IN GENERAL
a. Definition and concept of taxation
It is an inherent power by which the sovereign:
1. through its law-making body
2. raises income to defray the
necessary expenses of government
3. by apportioning the cost among
those who, in some measure are privileged to
enjoy its benefits and, therefore, must bear its
burdens. (51 Am.Jur. 34)
Note: Simply stated, the power of taxation is
the power to impose burdens on subject and
objects within its jurisdiction.
Taxation mode of raising revenue for public
purposes.
Taxes enforced proportional contributions
from persons and property, levied by the State
by virtue of its sovereignty for the support of
the government and for all its public needs.
enforced contributions; Taxes are
obligations created by law. Taxes are never
founded on contract or agreement, and are not
dependent for their validity upon the individual
consent of the persons taxed.
proportional in character, since taxes
are based on ones ability to pay.
levied by law; It is a legislative power,
it cannot be imposed by the executive
department nor by the courts.
support of the government and all its
public needs.
b. Nature of taxation
i. Inherent Power
1. CREBA vs. ROMULO - Taxes are the lifeblood
of the government. Without taxes, the
government can neither exist nor endure. The
exercise of taxing power derives its source
from the very existence of the State whose
social contract with its citizens obliges it to
promote public interest and the common good.
Taxation
is
an
inherent
attribute
of
sovereignty. It is a power that is purely
legislative. Essentially, this means that in the
legislature primarily lies the discretion to
determine the nature (kind), object (purpose),
extent (rate), coverage (subjects) and situs
(place) of taxation. It has the authority to
prescribe a certain tax at a specific rate for a

particular public purpose on persons or things

within its jurisdiction. In other words, the
legislature wields the power to define what tax
shall be imposed, why it should be imposed,
how much tax shall be imposed, against whom
(or what) it shall be imposed and where it shall
be imposed.
As a general rule, the power to tax is plenary
and unlimited in its range, acknowledging in
its very nature no limits, so that the principal
check against its abuse is to be found only in
the responsibility of the legislature (which
imposes the tax) to its constituency who are to
pay it. Nevertheless, it is circumscribed by
constitutional limitations. At the same time,
like any other statute, tax legislation carries a
presumption of constitutionality.
ii. Legislative Power
1. CIR vs. FORTUNE TOBACCO CORP. -