Lalaine Mae L.
Balmes September 26, 2021
201812779 BGMT 28A
Reflection Paper
As per the discussion last meeting, I attained that one of the inherent powers of
the state is the power of taxation. It considered as the strongest power among the three
(3) for the reason that the collected money of the government will serve as the budget for
the state to continue to exist and to effectively operate. However, the power of taxation is
considered as not absolute meaning there are limitations provided and it is being stated
that there are two (2) types of limitations.
The limitations on the power of taxation may either be:
(1) Inherent Limitations; and
(2) Constitutional Limitations
In inherent limitations, it is the limitations that is automatically inherent or nature
and there is no need to put into the constitution because it considered as “likas na”. But,
as mentioned that although it is not on the constitution we must know the limitations of
the power of taxation. On the other hand, the constitutional limitations is the limitations
that we can be found on our constitution. It serves as our protection.
Under the inherent limitations there are five (5):
(1) Public Purpose. The proceeds of the tax should be for the public purpose. It
should be used in the development of the infrastructure, education and other activity of
the government for the welfare of the people wherein they will be benefited.
(2) Delegation of Tax Power. There are authorized people who are allowed to
collect tax. However, there are three (3) exemptions on non-delegation:
- The delegation of the President under the Article 6, Section 28 (2)
which the President have the authority to fix the tariff rates.
- The LGUs or the Local Government Units also have the authority
to collect tax to create their own source of revenues. It is under the
Article 10, Section 5.
- Third is delegation to administrative agencies.
(3) Situs of Taxation. This is also known as the place of taxation wherein the
power of taxation is limited only within the boundaries of the state. It mentioned that there
are ways or factors to determined the situs of taxation. Through the residence of taxpayer,
nature of tax, citizenship, nationality, and source we are able to consider and determine
the situs of taxation.
a. Poll Taxes. The residence of the taxpayer, regardless of what is
the citizenship of the taxpayer must pay the tax to that location.
b. Real Property. The location of the property. If my property for
example is located here in Cavite, here in Cavite where I am going
to pay the tax for my property.
c. Intangible Personal Property. Domicile of the owner unless he/she
acquired a situs elsewhere.
(4) People’s Initiative. As mentioned in the Republic Act 6735 wherein the citizens
of the state or the Philippines are allowed by law to create or proposed a bill and send it
in the Congress. And the Congress will decide if it is for approval or rejection.
(5) International Comity. Meaning the property of foreign states found within our
territory be exempt from taxation. According to the International law, it is not allowed to
imposed a tax from a state to another state.
Under the constitutional limitations on the other hand, there are eight (8):
(1) Due Process of Law. It simply stated that there should be a law in order for
taxes to be implemented. There should be a right process to assess in collecting the
taxes.
(2) Equal Protection of Law. There is no exemptions in the eye of the law. The
taxpayers must pay their taxes based on their income.
(3) Uniformity vs. Equity in Taxation. It is being stated that there are rule in
taxation and it shall uniform and equitable. The taxes depends pala on what class you
belong or in Filipino the “estado” of a person and that what we call relative equality.
(4) Prohibition against Non-impairment of contracts
(5) Prohibition against Non-payment of poll tax
(6) Prohibition against appropriation of proceeds of taxation for the use, benefit,
or support of a church.
(7) Prohibition against taxation of real property actually, directly and exclusively
used for religious, charitable and educational purposes.
(8) Prohibition against taxation of the revenues and assets of non-stock, non-
profit educational institutions.