Essential characteristics of tax

As indicated above, they are enumerated below.

(1) It is an enforced contribution. – A tax is not a voluntary payment or donation (84 C.J.S. 32.) and its imposition is in no way dependent upon the will or assent, open or implied, of the person taxed. (71 Am. Jur. 2d 344.) To be sure, taxation without representation, or without the consent in some form of those who are to be taxed, is contrary to the fundamental principles of good government. The principle of representation, however, applies only to political communities, as such, and not to individuals. It is satisfied by their adequate representation in the legislative body which votes the tax. (83 C.J.S. 48.)

(2) It is generally payable in money. – Unless qualified by law (e.g., backpay certificates under Sec. 2, R.A No. 304, as amended.), the term “taxes” or “tax” is usually understood to be a pecuniary burden – an exaction to be discharged alone in the form of money which must be in legal tender.

(3) It is proportionate in character. – A tax is laid by some rule of apportionment according which persons share the public burden. It is ordinarily based on ability to pay. Thus, in practice, some people pay very high taxes; others, very small amounts or none at all.

(4) It is levied on persons or property. – A tax may also be imposed on acts, transactions, rights or privileges. In each case, however, it is only a person who pays the tax. The property is resorted to for the purpose of ascertaining the amount of tax that must be paid and of enforcing payment in case default of the taxpayer. (84 C.J.S. 36.) But not all who pay a tax shoulder the burden of the tax.

(5) It is levied by the state which has jurisdiction over the person or property. – The object to be taxed must be subject to the jurisdiction of the taxing state. (infra.) This is necessary in order that the tax can be enforced. Although a state can tax all persons subject to its jurisdiction for all their property left by them within its jurisdiction to seize upon person or property for purposes of taxation.

(6) It is levied by the law-making body of the state. – The power to tax is a legislative power which under the Constitution only Congress can exercise through the enactment of tax statutes. Accordingly, the obligation of a tax is statutory liability.

(a) The power to tax is granted by the Constitution to local government subject to such guidelines and limitations as may be provided by law.

(b) During the period of martial law, (Sept. 21, 1972 to Jan. 17, 1981), the then incumbent President exercised the executive powers vested under the 1973 Constitution in the Prime Minister (who was the Chief Executive before its amendment in  1981) as well legislative powers through the issuance of “presidential decrees”.

(c) By virtue of Amendment No. 6 to the 1973 Constitution, the President was given concurrent legislative authority under certain conditions, which he exercised even after the lifting of martial law.

(d) Pending the ratification of a new Constitution and in the absence of a legislative body in the Provisional Government installed on February 25,1986, the President exercised legislative power through the issuance of executive orders under the convening of Congress on July 27, 1987.

(7) It is levied for public purpose or purposes. – Taxation involves, and a tax constitutes, s charge or burden imposed to government, the administration of the law, or the payment of public expenses. Revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private persons. (Gaston vs. Republic Planters Bank, 158 SCRA 626, Mar. 15 1988.) The “public purpose or purposes” of the imposition is implied in the levy of tax.

It is also an important characteristic of most taxes that they are commonly required to be paid at regular periods or intervals every year.

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