They are:
(1) Fiscal adequacy. – It means that the sources of the revenue, that is, receipts therefrom, taken as a whole, should be sufficient to meet the demands of public expenditure. It means also that the revenues should be elastic or capable of expanding or contracting annually in response to variations in public expenditures.
The alternatives are (a) to incur the risk of a series of deficits or surpluses due to inelastic revenues; or (b) to adjust the amount of public expenditures to fit the flow of funds probably or curtailing certain activities so that the budget may be balanced. Elasticity may be obtained without creating any new tax machinery but merely by changes in the rates applicable to existing taxes. Views may differ, of course, as to the means of attaining elasticity in tax revenues.
(2) Equality or theoretical justice. – It means that the tax burden should be in proportion to the taxpayer’s ability to pay. This is the so-called ability-to-pay principle. It also connotes that the contribution of each person towards the expense of the government should be so apportioned such that he would feel neither more nor less inconvenienced from his share of the payment than every other person experiences from his.
In other words, taxation should be uniform as well as equitable; and
(3) Administrative feasibility. – It means that the tax laws should be capable of convenient, just and effective administration.
No tax, however ideally just and fair, is better that its actual operation. Each tax in the system should be clear and plain to the taxpayer, capable of uniform enforcement by government officials, convenient as to the time, place, and manner of payment, and not unduly burdensome upon, or discouraging to business activity. Tax laws should close up loopholes for tax evasion and deter the unscrupulous officials from committing frauds in the assessment and collection of taxes.
More at UtakPinoy.Com and Pleader.Org
Friday, May 5, 2017
Thursday, May 4, 2017
Non-revenue objectives of taxation
The primary purpose of taxation is, of course, to raise revenue for the support of the government. However, taxation is often employed as a device for regulation by means of which certain effects or conditions envisioned by governments may be achieved. Thus:
(1) Taxation can strengthen anemic enterprises or provide incentive to greater production through grant of tax exemptions or the creation of conditions conducive to their growth.
(2) Taxes on imports may be increased to protect local industries against foreign competition or decreased to encourage foreign trade.
(3) Taxes on imported goods may also be used as a bargaining tool by a country by setting tariff rates first at a relatively high level before trade negotiations are entered into with another country to enhance its bargaining power.
(4) Taxes may be increased in periods of prosperity to curb spending power and halt inflation or lowered in periods of slump to expand business and ward off depression.
(5) Taxes may be levied to reduce inequalities in wealth and incomes, as for instance, the state, donor’s and income taxes, their payers being the recipients of unearned wealth or mostly in the higher income brackets.
(6) Taxes may be levied to promote science and invention or to finance educational activities or to improve the efficiency of local police forces in the maintenance of peace and order through grant of subsidy.
(7) Taxation may be made as an implement of the police power to promote the general welfare. By way of illustration, it has been held that the Sugar Adjustment Act is an act enacted primarily under the police power and designed to obtain of the readjustment of the benefits derived by people interested in the sugar industry which constitutes on e of the great sources of the country’s wealth and, therefore, affects a great portion of the population of the country.
As long as a tax is for a public purpose, its validity is not affected by collateral purposes or motives of the legislature in imposing the levy, or by the fact that it has a regulatory effect or it discourages or even definitely deters the activities taxed. The principle applies even though the revenue obtained from the tax appears very negligible or the revenue purpose is only secondary.
More at UtakPinoy.Com and Pleader.Org
(1) Taxation can strengthen anemic enterprises or provide incentive to greater production through grant of tax exemptions or the creation of conditions conducive to their growth.
(2) Taxes on imports may be increased to protect local industries against foreign competition or decreased to encourage foreign trade.
(3) Taxes on imported goods may also be used as a bargaining tool by a country by setting tariff rates first at a relatively high level before trade negotiations are entered into with another country to enhance its bargaining power.
(4) Taxes may be increased in periods of prosperity to curb spending power and halt inflation or lowered in periods of slump to expand business and ward off depression.
(5) Taxes may be levied to reduce inequalities in wealth and incomes, as for instance, the state, donor’s and income taxes, their payers being the recipients of unearned wealth or mostly in the higher income brackets.
(6) Taxes may be levied to promote science and invention or to finance educational activities or to improve the efficiency of local police forces in the maintenance of peace and order through grant of subsidy.
(7) Taxation may be made as an implement of the police power to promote the general welfare. By way of illustration, it has been held that the Sugar Adjustment Act is an act enacted primarily under the police power and designed to obtain of the readjustment of the benefits derived by people interested in the sugar industry which constitutes on e of the great sources of the country’s wealth and, therefore, affects a great portion of the population of the country.
As long as a tax is for a public purpose, its validity is not affected by collateral purposes or motives of the legislature in imposing the levy, or by the fact that it has a regulatory effect or it discourages or even definitely deters the activities taxed. The principle applies even though the revenue obtained from the tax appears very negligible or the revenue purpose is only secondary.
More at UtakPinoy.Com and Pleader.Org
Wednesday, May 3, 2017
Extent of the legislative power to tax
The power of taxation being legislative, all its incidents are naturally within the control of the legislature. Subject to constitutional and inherent restrictions (infra.), the legislature has discretion to determine the matters mentioned subsequently.
(1) The subjects or objects to be taxed. – These refer to the coverage and the kind of nature of the tax. They may be persons, whether natural or juridical; property, whether real or personal, tangible or intangible: business, transactions, rights, or privileges. A state is free to select the subject of taxation and it has been repeatedly held that the inequalities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation so long as such exemption is reasonable and not arbitrary. Thus, the power to tax carries with it the power to grant exemption therefrom.
(2) The purpose or object of the tax as long as it is a public purpose. – The legislative body can levy a tax or make an appropriation provided it is for a public purpose. Its determination, however, on the question of what is a public purpose is not conclusive. The courts can inquire into whether the purpose is really public or private. In the final analysis, therefore, the decision on the question is not a legislative but a judicial function. But once it is settled that the purpose is public, the courts can make no other inquiry into the objective of the legislative in imposing a tax, or the wisdom, advisability, or expediency of the tax.
Judicial action is limited only to a review where it involves:
(a) The determination of the validity of the tax in relation constitutional precepts or provisions. Thus, a tax may be declared invalid because it violates the constitutional requirement of uniformity and equity; or
(b) The determination in an appropriate case of the application of a la. Thus, a court may be decide that a tax has been illegally collected where the taxpayer is entitled to tax exemption or his liability has already been extinguished by reason of prescription.
(3) The amount of rate of the tax. – As a general rule, the legislature may levy a tax of any amount or rate it sees fit. If the taxes are oppressive or unjust, the only remedy is the ballot box and the election of new representatives.
(a) According to Chief Justice John Marshall, “the power to tax involves the power to destroy.” To say. However, that the power to tax is the power to destroy is to describe not the purposes for which the taxing power may be used but the extent to which it may be employed in order to raise revenues. Thus, even if a tax should destroy a business, such fact alone could not invalidate the tax.
As long as the power is exercised within the bounds of constitutional limitations, a tax cannot be held invalid merely because the power which is manifested by its imposition may involve the power to destroy.
(b) Incidentally, our Constitution mandates that “the rule of taxation shall be uniform and equitable.” In a case, our Supreme Court said “The power of taxation is sometimes called also the power to destroy. Therefore, it should be exercised with the caution to minimize injury to the proprietary rights of the taxpayer. It must be exercised fairly, equally and uniformly, lest the tax collector kills the ‘hen that lays the golden eggs’! And in order to maintain the general public’s trust and confidence in the government, this power must be used justly and treacherously.”
(4) The manner, means, and agencies of collection of the tax. – These refer to the administration of the tax or the implementation of tax laws. Having the sole power to tax, the legislature must equally possess the sole power to prescribe the mode or method by which the tax shall be collected, and to designate the officers through whom its will shall be enforced, as well as the remedies which the State or the taxpayer may avail in connection therewith.
While it is true that executive officials enforce tax laws, this does not involve the choice of the subjects to be taxed, the fixing of the measure or amount of the tax, or the definition of the purpose for which the tax is levied.
More at UtakPinoy.Com and Pleader.Org
(1) The subjects or objects to be taxed. – These refer to the coverage and the kind of nature of the tax. They may be persons, whether natural or juridical; property, whether real or personal, tangible or intangible: business, transactions, rights, or privileges. A state is free to select the subject of taxation and it has been repeatedly held that the inequalities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation so long as such exemption is reasonable and not arbitrary. Thus, the power to tax carries with it the power to grant exemption therefrom.
(2) The purpose or object of the tax as long as it is a public purpose. – The legislative body can levy a tax or make an appropriation provided it is for a public purpose. Its determination, however, on the question of what is a public purpose is not conclusive. The courts can inquire into whether the purpose is really public or private. In the final analysis, therefore, the decision on the question is not a legislative but a judicial function. But once it is settled that the purpose is public, the courts can make no other inquiry into the objective of the legislative in imposing a tax, or the wisdom, advisability, or expediency of the tax.
Judicial action is limited only to a review where it involves:
(a) The determination of the validity of the tax in relation constitutional precepts or provisions. Thus, a tax may be declared invalid because it violates the constitutional requirement of uniformity and equity; or
(b) The determination in an appropriate case of the application of a la. Thus, a court may be decide that a tax has been illegally collected where the taxpayer is entitled to tax exemption or his liability has already been extinguished by reason of prescription.
(3) The amount of rate of the tax. – As a general rule, the legislature may levy a tax of any amount or rate it sees fit. If the taxes are oppressive or unjust, the only remedy is the ballot box and the election of new representatives.
(a) According to Chief Justice John Marshall, “the power to tax involves the power to destroy.” To say. However, that the power to tax is the power to destroy is to describe not the purposes for which the taxing power may be used but the extent to which it may be employed in order to raise revenues. Thus, even if a tax should destroy a business, such fact alone could not invalidate the tax.
As long as the power is exercised within the bounds of constitutional limitations, a tax cannot be held invalid merely because the power which is manifested by its imposition may involve the power to destroy.
(b) Incidentally, our Constitution mandates that “the rule of taxation shall be uniform and equitable.” In a case, our Supreme Court said “The power of taxation is sometimes called also the power to destroy. Therefore, it should be exercised with the caution to minimize injury to the proprietary rights of the taxpayer. It must be exercised fairly, equally and uniformly, lest the tax collector kills the ‘hen that lays the golden eggs’! And in order to maintain the general public’s trust and confidence in the government, this power must be used justly and treacherously.”
(4) The manner, means, and agencies of collection of the tax. – These refer to the administration of the tax or the implementation of tax laws. Having the sole power to tax, the legislature must equally possess the sole power to prescribe the mode or method by which the tax shall be collected, and to designate the officers through whom its will shall be enforced, as well as the remedies which the State or the taxpayer may avail in connection therewith.
While it is true that executive officials enforce tax laws, this does not involve the choice of the subjects to be taxed, the fixing of the measure or amount of the tax, or the definition of the purpose for which the tax is levied.
More at UtakPinoy.Com and Pleader.Org
Tuesday, May 2, 2017
Aspects of taxation
The exercise of the power of taxation involves two (2) aspects and, they are:
(1) Levying or imposition of the tax which is legislative act; and
(2) Collection of the tax levied which is essentially administrative in character.
The first is taxation, strictly speaking, while the second (including payment by the taxpayer) may be referred to as tax administration. The two processes together constitute the “taxation system.”
More at UtakPinoy.Com and Pleader.Org
(1) Levying or imposition of the tax which is legislative act; and
(2) Collection of the tax levied which is essentially administrative in character.
The first is taxation, strictly speaking, while the second (including payment by the taxpayer) may be referred to as tax administration. The two processes together constitute the “taxation system.”
More at UtakPinoy.Com and Pleader.Org
Subscribe to:
Posts (Atom)