Introduction to Taxation

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Taxation I

AY 2009 – 2010

First Semester

Atty. Deborah S. Acosta

Textbook: Law of Basic Taxation in the Philippines (Revised Edition),

Benjamin B. Aban

I. General Principles

Aban, pp. 1 -168

A. Definition of Taxation

Cases:

 Commissioner of Internal Revenue v. Algue, Inc., G.R. No. L-28896,

17 February 1988

B. Nature of the Power of Taxation

1. Attribute of sovereignty

2. Legislative in character

a. Scope of the legislative taxing power

i. Authority to determine the nature, object, extent,

coverage, apportionment of the tax, situs of the

imposition, and method of collection

ii. Authority to grant tax exemptions or condonations

iii. Authority to specify or provide for the

administrative as well as judicial remedies

3. Not delegated to executive or judicial department

a. Exceptions

i. Local governments (Sec. 5, Article X, Constitution)

ii. When allowed by the Constitution (Sec. 28(2), Art.

VI, Constitution)

iii. When delegation merely relates to administrative

implementation or implied from the policy and

purpose of the Act

4. Subject to inherent and constitutional limitations

Cases:

 Mactan Cebu International Airport Authority v. Marcos, 261

SCRA 667 (1996)

 Planters Products, Inc. v. Fertiphil Corp., G.R. No. 166006, 14

March 2008

 Maceda v. Macaraig, 197 SCRA 771

 Petron v. Pililla, 198 SCRA 82

 Pepsi-Cola Bottling Company of the Phil. v. Mun. of Tanauan,

Leyte, 69 SCRA 460

 FELS Energy, Inc. v. The Province of Batangas, G.R. No. 168557,

16 February 2007

 Petron v. Tiangco, G.R. No. 158881, 16 April 2008

 City Government of Quezon City v. Bayantel, Inc., G.R. No.

162015, 6 March 2006

C. Aspects of Taxation

1. Levy

2. Assessment

3. Collection

D. Theory or Underlying Basis of Taxation

1. Lifeblood Theory / Necessity Theory

2. Benefits-Protection Theory

Cases:

 Commissioner of Internal Revenue v. Algue, supra.

 Phil. Guaranty Co., Inc. v. CIR, G.R. No. L-22074, 6 September

1965

 FELS Energy, Inc. v. The Province of Batangas, supra.

E. Purposes and Objectives of Taxation

1. Revenue

2. Regulatory / Sumptuary

3. Promotion of General Welfare

4. Reduction of Social Inequality

5. Encouragement of Economic Growth

6. Protectionism

Cases:

 Southern Cross Cement Corp. v. Cement Manufacturers

Association of the Phil., et al., G.R. No. 158540, 3 August 2005

 Caltex Phils. v. COA, G.R. No. 92585, 8 May 1992

 Gerochi v. DOE, G.R. No. 159796, 17 July 2007

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Taxation I AY 2009 – 2010 First Semester Atty. Deborah S. Acosta Textbook: Law of Basic Taxation in the Philippines (Revised Edition), Benjamin B. Aban I. General Principles Aban, pp. 1 -168 A. Definition of Taxation Cases: Commissioner of Internal Revenue v. Algue, Inc., G.R. No. L-28896, 17 February 1988 B. Nature of the Power of Taxation 1. Attribute of sovereignty 2. Legislative in character a. Scope of the legislative taxing power i. Authority to determine the nature, object, extent, coverage, apportionment of the tax, situs of the imposition, and method of collection ii. Authority to grant tax exemptions or condonations iii. Authority to specify or provide for the administrative as well as judicial remedies 3. Not delegated to executive or judicial department a. Exceptions i. Local governments (Sec. 5, Article X, Constitution) ii. When allowed by the Constitution (Sec. 28(2), Art. VI, Constitution) iii. When delegation merely relates to administrative implementation or implied from the policy and purpose of the Act 4. Subject to inherent and constitutional limitations Cases: Mactan Cebu International Airport Authority v. Marcos, 261 SCRA 667 (1996) Planters Products, Inc. v. Fertiphil Corp., G.R. No. 166006, 14 March 2008 Maceda v. Macaraig, 197 SCRA 771 Petron v. Pililla, 198 SCRA 82 Pepsi-Cola Bottling Company of the Phil. v. Mun. of Tanauan, Leyte, 69 SCRA 460 FELS Energy, Inc. v. The Province of Batangas, G.R. No. 168557, 16 Febr ...
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