Limitations on the Power to Tax
No use of public money or property for religious
1. Inherent limitations proceeds from the very
nature of the taxing power itself. They are otherwise
known as elements or characteristics of taxation.
[SPINE]
a. Situs or territoriality / Territorial jurisdiction
b. Public purpose
c. International comity
d. Non-delegability of the taxing power itself
e. Exemption of the Government
2. Constitutional Limitations restrictions imposed
by the Constitution.
a. General or Indirect
i. Due process clause [Sec. 1, Art. III, Constitution]
ii. Equal protection clause [Sec. 1, Art. III,
Constitution]
iii. Freedom of the press [Sec. 4, Art. III, Constitution]
iv. Religious freedom [Sec. 5, Art. III, Constitution]
v. Eminent domain [Sec. 9, Art. III, Constitution]
vi. Non-impairment clause [Sec. 10, Art. III,
Constitution]
vii. Law-making process [Sec. 26, Art. VI, Art. III,
Constitution]
viii. Presidential power to grant reprieves,
commutations, pardons and remit fines and
forfeitures after conviction by final judgment.
[Sec.19, Art. VII, Constitution]
b. Specific or Direct
i. Non-imprisonment for non-payment of poll tax
[Sec. 20, Art. III, Constitution]
ii. Taxation shall be uniform and equitable [Sec.
28(1), Art. VI, Constitution]
iii. Progressive system of taxation [Sec. 28(1), Art. VI,
Constitution]
iv. Origin of revenue and tariff bills [Sec. 24, Art VI,
Constitution]
v. Veto power of the President [Sec. 27(2), Art. VI,
Constitution]
vi. Delegated authority of the President to impose
tariff rates, import and export quotas, tonnage and
wharfage dues [Par. 2, Sec. 28, Art. VI, Constitution]
vii. Tax exemption of charitable institutions,
churches, parsonages, convents, all lands, buildings
and improvements actually, directly or exclusively
used. [Par. 3, Sec. 28, Art. VI, Constitution]
viii. Voting requirement for tax exemption [Par. 4,
Sec. 28, Art. VI, Constitution]
ix.
purposes [Par. 3, Sec. 28, Art. VI, Constitution]
x. Special assessments [Par. 3, Sec. 29, Art. VI,
Constitution]
xi. Supreme Courts power to review judgments or
orders of lower courts [Sec. 5(b), Art. VIII,
Constitution]
xii. Grant of autonomy to local government units
[Secs.5 & 6, Art. X, Constitution]
xiii. Tax exemption granted to non-stock, non- profit
educational institutions, proprietary or cooperative
educational institutions [Sec. 4, Art XIV, Constitution]
xiv. Tax exemption of grants, endowments,
donations or contributions used actually, exclusively
and directly for educational purposes. [Sec. 4, Art
XIV, Constitution]
Taxpayers Suit
It is a case where the act complained of directly
involves the illegal disbursement of public funds
collected through taxation.
Double Taxation
Otherwise described as direct duplicate taxation,
the two taxes must be imposed on the same subject
matter, for the same purpose, by the same taxing
authority, within the same jurisdiction, during the
same taxing period; and the taxes must be of the
same kind or character. (City of Manila v. Coca Cola
Bottlers Philippines, G.R. No. 181845, Aug. 4, 2009)
Kinds of Double Taxation
a. Direct Double Taxation (Obnoxious) - Double
taxation in the objectionable or prohibited sense
since it violates the equal protection clause
b. Indirect Double Taxation - Not repugnant to the
Constitution.
i. This is allowed if the taxes are of different nature
or character imposed by different taxing authorities.
ii. Generally, it extends to all cases when one or
more elements of direct taxation are not present.
Methods of Avoiding Occurrence of Double Taxation
 the taxpayer to further or additional civil or criminal
1. Tax credit an amount subtracted from taxpayers liabilities (Commissioner v. Estate of Benigno Toda Jr.
tax liability in order to arrive at the net tax due. G.R. No. 30554, Feb. 28, 1983). Tax evasion is
2. Tax deduction an amount subtracted from the somestimes referred to as Tax Dodging.
gross amount on which a tax is calculated.
3. Tax exemption a grant of immunity to particular
persons or entities from the obligation to pay taxes.
4. Imposition of a rate lower than the normal
domestic rate

Tax Exemptions

Tax Laws Nature

Tax laws are:

1. Not political
2. Civil in nature
3. Not penal in character

Tax Laws Sources

Tax Laws Construction

1. Generally, no person or property is subject to tax

unless within the terms or plain import of a taxing
statute.
2. Tax laws are generally prospective in nature.
3. Where the language is clear and categorical, the
words employed are to be given their ordinary
meaning.
4. When there is doubt, tax laws are strictly
construed against the Government and liberally in
favor of the taxpayer.
Note: Taxes, being burdens, are not to be presumed
beyond what the statute expressly and clearly
provides.
5. Provisions of the taxing act are not to be extended
by implication.
6. Tax laws are special laws and prevail over general
laws.

Tax Evasion

It is the scheme where the taxpayer uses illegal or

fraudulent means to defeat or lessen payment of a
tax.

Note: Tax evasion is a scheme used outside of those

lawful means and when availed of, it usually subjects