F.

As to graduation of rate (Three systems of

taxation)
1) Proportional - based on a fixed percentage
of the amount of the property, income or
other basis to be taxed
Ex. Real estate tax, VAT, percentage tax
2) Progressive or graduated - tax rate
increases as the tax base or bracket
increases
Ex. Income tax, estate tax, donors tax
3) Regressive - tax rate decreases as the tax
base increases
4) Degressive - increase of rate is not
proportionate to the increase of tax base
SITUS OF TAXATION - the place of taxation, the
country that has the power to levy and collect the
tax.
TAX DISTINGUISHED FROM POLICE POWER
TAX POLICE POWER (in
the form of a FEE)
Purpose Raise revenue Exercise to promote
public welfare through
regulation
Amount of
exaction
No limit Limited to the cost of
regulation, issuance
of license, or
surveillance
Superiority
of
contracts
Contracts may
be impaired
unless (a)
government is
party to
contract
granting
exemption; or
(b) involves
franchise
Contracts may be
impaired
Transfer
of
property
rights
Taxes paid
form part of the
public funds
Allows merely the
restraint on the
exercise of property
rights

TAX DISTNGUISHED FROM EMINENT DOMAIN

TAX EMINENT DOMAIN
Purpose Raise
revenue
The taking of
property for public
use
Compensation Payment of Just compensation
taxes accrue
to the general
benefit of the
citizens of the
taxing State
is given the owner
of the expropriated
property
Persons
affected
Applies to all
persons,
property and
excises that
may be
subject
thereto
Only particular
property is
comprehended
TAX DISTINGUISHED FROM LICENSE FEE
TAX LICENSE FEE
Source Exercise of
Taxing power
Emanate from the police
power of the State
Purpose Raise
revenue
Regulation
Object Persons,
property and
privilege
Right to exercise a
privilege
Amount no limit only necessary to carry
out regulation
Distinction lies in the primary purpose:
License fee if primary purpose is to
regulate and the excess of the amount
collected from the cost to carry out the
regulation is minimal and incidental.
Tax if primary purpose, or at least one of
the real and substantial purposes is to
raise revenue.
If amount is too high for regulation, it would
be a tax; unless imposed on non-useful
occupations or businesses.

 Purpose of distinction: limitations and

exemptions apply only to one and not to the
other (ex. Exemption from taxation does not
include exemption from fee)
TAX DISTINGUISHED FROM DEBT
TAX DEBT
Source Law; legal
obligation
Based on contract
Personal Assignable

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Generally not
subject to
compensation/setoff
May be the subject
of
compensation/setoff
Imprisonment is
sanction for nonpayment
No imprisonment
for non-payment
GENERAL RULE: Taxes cannot be the subject of
compensation or set-off
* A person cannot refuse to pay a tax on the ground
that the government owes him an amount equal to or
greater than the tax being collected. The collection of
tax cannot await the results of a lawsuit against the
government.
Reasons:
a) lifeblood theory
b) taxes are not contractual obligation (absence
of consent of taxpayer)
c) taxpayer and government are not mutual
debtors and creditors of each other
EXCEPTIONS:
1) Both claims already became overdue and
demandable as well as fully liquidated there
must have already been an act of appropriation
by the government (legislative) of funds for
payment of the debt.
2) Tax overpayment (BIRs obligation to refund or
set-off arises from time tax was paid)
3) If the case involves local government taxes
TAX DISTINGUISHED FROM SPECIAL
ASSESSMENT
TAX SPECIAL
ASSESSMENT
Imposed
on
persons,
properties, etc.

Only on land
Why
imposed
regardless of
public
improvement
Public improvement
that benefits the land
Purpose Support of
government
Contribution to cost
of public
improvement
When
imposed
Regular exaction Exceptional as to
time and locality
Basis Necessity Benefits obtained
TAX DISTINGUISHED FROM TOLL
TAX TOLL
Kind of
demand
Demand of
sovereignty
Demand of
ownership
Purpose support of
government
Collection for the
use of property
Amount no limit depends
on need of the
government
Fair return of the
cost of the property
or improvement
TAX DISTINGUISHED FROM CUSTOMS DUTY
TAX CUSTOMS
DUTY
Coverage More comprehensive
than customs duty
kind of tax
Object Persons, prop, etc goods imported
or exported
DOCTRINE OF EQUITABLE RECOUPMENT
1) refund of a tax illegally or erroneously collected
or overpaid by a taxpayer
2) such tax refund is barred by prescription
3) tax presently being assessed against a taxpayer
4) may be recouped or set-off against the tax barred
by prescription
not allowed in Philippines, reason - LIFE BLOOD
CONCEPT OF DOUBLE TAXATION
Kinds of Double Taxation
A. DIRECT DUPLICATE

 taxing same person, property or right

twice
for the same purpose
by the same taxing authority
within the same jurisdiction or taxing
district
within the same taxable period
and they must be of the same kind or
character of tax
B. INDIRECT DUPLICATE
Exists if any of the elements for Direct
taxation is not present

No constitutional prohibition on double taxation.

However, where there is direct duplicate taxation
then there may be violation of the constitutional
precepts of equal protection and uniformity in
taxation.