ng bansa kung saan nakatira tatay nya is iaccquire

LESSON #1: THE SOURCE OF THE ng bata yung citizenship kung saan sya
POWER OF TAXATION pinanganak there will be a problem)***
 Those who are naturalized accordance with
law.
How Does a State Acquire the Power of Taxation?
***NOTE:
There are two kinds of Filipino Citizens:
STATE is a community of persons more or less
numerous, permanently occupying a definite
1. Natural born
portion of territory, having a government of their
2. Naturalized
own to which the great body of inhabitants render
habitual obedience, and enjoying freedom from
2 PRINCIPLES USED DETERMINING
external control.
CITIZENSHIP:
FIVE ELEMENTS OF STATE
First – the jus sanguinis principle, which states
-community of persons (people)
that “blood relations” determine citizenship
-definite portion of territory (territory)
(common sa Pilipinas)
-having a government (government)
Second – the jus soli or jus loci principle – kung
-freedom from external control (sovereignty)
saan ka pinanganak ayun ang citizenship mo
-International Recognition
(common sa Americas)
 PEOPLE
2 KINDS OF NATURALIZATION
 community of persons
A. JUDICIAL NATUTALIZATION – refers to
 mass of populations ling within the state
naturalization by means of court judgement
 the inhabitants of the state
pursuant to the “Revised Naturalization
 the entire body of those citizens of the state
Act.” Application are files with the proper
who are vested with political power for
Regional Trial Court which will render the
political purposes.
decree of naturalization.
B. LEGISLATIVE NATURALIZATION – refers
NATIONALITY – race/lahi
to naturalization by means of a direct act of
CITIZENSHIP – allegiance to the government
Congress, that is, by the enactment of a
law Congress declaring therein that a
CITIZEN -> subject of the power of taxation;
foreigner is conferred citizenship and
support to the government or to that power.
admitted into the political community; and
they inhabit in a definite territory. It is
Filipino Citizens; 1987 Constitution - Sec. 1, Art, IV
definite of fixed place where they reside
 those who are citizens of the Philippines at
permanently; develop a community of
the time of adoption of this Constitution;
interests and a sense of unity.
 Those whose fathers or mothers are
citizens of the Philippines;
 TERRITORY
 Those born before January 17, 1973 of
 definite portion of territory (territory)
Filipino mothers who elected citizenship
 is a geographic area belonging to or under the
upon reaching the age of majority; and
jurisdiction of a governmental authority.
 Philippine National Territory includes:
*** NOTE: under the old Civile code, the father is
a. The Philippine archipelago, with all
the administrator of conjugal properties therefore,
the islands and water embraced
if he will have a child it is automatic a Filipino; on
therein;
the other hand, mothers/women does not have
b. All other territories over which the
any power to have properties or to posses any
Philippines has sovereignty of
status, if a Filipino woman decided to marry a
jurisdiction consisting of territorial,
foreigner therefore, her child is NOT considered as
fluvial and aerial domains;
Filipino. If the child wants to acquire the Filipino
c. The territorial sea, the seabed, the
citizenship she/he needs to be elect Filipino
subsoil, and insular shelves and other
Citizenship otherwise he/she still bearing the
submarine areas; and
citizenship of his/her father. EXCEPT (if yung rule
 d. The waters around, between, and such as saying “The United Sates
connecting the islands of the has become an aristocracy.”
archipelago, regardless of their breadth o Dictatorship – consists of rule by
and dimensions. one person or a group people.

Archipelagic Doctrine – the Philippine PRESENT FORM OF GOVERNMENT IN THE

Archipelago is considered as one integrated unit PHILIPPINES
instead of being divided into more than seven
thousand islands. This assertion together with the  Republic of the Philippines is a
application of the straight baseline method is what Constitutional Democracy
is referred as the Archipelagic Doctrine.  3 branches of Constitutional
Democracy:
 Straight Baseline Method, by using this o The Legislative Branch is
method, the outermost points of our authorized to make laws, alter, and
archipelago are connected with straight repeal them through the power
baseline and all waters inside the baseline vested in the Philippine Congress.
are considered as internal waters. This institution is divided into the
Senate House (Upper) and (Lower)
 GOVERNMENT House of Representatives. (they
 having a government create the law)
 refers to the agency to which the will of the o The Executive Branch is
state is formulated, expressed, and carried composed of the President and the
out. Vice President who are elected by
 Indispensable machinery by means of which direct popular vote and serve a term
the state maintains its existence, carries on its of six years. The Constitution grants
functions and realizes its policies and the President authority to appoint
objectives. his Cabinet. These departments
 Lifeless, it is a system. form a large portion of the country’s
 Common types: bureaucracy. (they implement the
o Democracy – literally rules by the law)
people, people govern. o The Judicial Branch holds the
o Republic – literal democracy is power settle controversies involving
impossible in a political system rights that are legally demandable
containing more than a few and enforceable. (they interpret the
representatives’ “democracies” are law)
really republics. In a republic, the
people elect representatives to  SOVEREIGNTY
make a law.  freedom from external control (sovereignty)
o Monarchy – consists of rule by a  4th essential element
king or queen. Sometimes a king is  Distinguishes the state from all other
called an “emperor,” especially if associations.
there is a large empire, such as  Word itself denotes supreme and final legal
China before 1911. There are no authority and beyond which no further legal
large monarchies today. The United power exists.
Kingdom, which has a queen, is a  Power to command and enforce obedience
really a republic because the queen free form foreign control.
has virtually no political power.  In 1935, Commonwealth of the Philippines was
o Aristocracy – rule by the established with US approval, and Manuel
aristocrats. They are typically Quezon was elected the country's first
wealthy, educated people. Many president. On July 4, 1946, full independence
monarchies have really been ruled was granted to the Republic of the Philippines
by aristocrats. Today, typically, the by the United States.
term “aristocracy” is used
negatively to accuse a republic of  INTERNATIONAL RECOGNITON
being dominated by rich people,
  Refers to the formal acknowledgement by one  Constitution is powerful
state that another state exists as a separate because it is the contract
and independent government. between the state and its
 State has no status among nations until it is people.
recognized by the other states, despite the  Ang contract ay may
recognizable government, and a certain cause and effect of
amount of continuity or stability. the law between the
 if the fifth element is not present - it cannot be contracting parties.
also consider as state as it is not recognized
internationally.  A constitution is always born out of a
revolution. Look at the history of
********************************************** Philippines, magkakaroon muna ng
other state: bivariate state - nakikipag away to revolution bago magkaroon ng panibagong
have independence constitution.
 Constitution may be change because of the
5 ELEMENTS CONVERGED> Power of Eminent generation kasi yung mga tao nag
Domain; Police Power; Power of Taxation. hihimagsik dahil ayaw na nila sa current
constitution. Whereas, it does not fit
anymore in their present needs and
conditions of the people (citizens).
 Congress alone cannot change the
constitution since the constitution was
LESSON #2: LIMITATIONS ON THE POWER OF drafted by the selected people of the
TAXATION country.
 Member of constitutional commission are
The study of the Philippine Individual Income not just elected like congressmen. When
Taxation you are constitutional commission
delegate, you possess the high integrity
(2) Two Limitations on The Power of probity and intelligence to make a
Taxation: constitution.
 Inherent
o Limitations already exist upon REVOLUTION = NEW CONSTITUTION
the creation of the power. When
the five elements of state are INHERET LIMITATIONS AND CONSTITUTIONAL
present (people, territory, LIMITATIONS
government, sovereignty, and  To define the power of taxation.
international recognition) there is a
created an independent state where 6 SIX INHERENT LIMITATIONS ON THE POWER
if the states acquire the status, we OF TAXATION
will have an inherent power.  it doesn’t have to be in the constitution.
o When the states acquire the powers,
automatically inherent limitations 1. Taxes may be levied only for public
already exist on that power. purposes.
- the right of taxation can only be use in aid
 Constitutional of a public object, an object which is within
o Limitations stated in the the purpose for which government is
constitutions established. It cannot be exercised in aid of
 E.g. The fundamental law of enterprises strictly private, for the benefit
the land – (batas na of individual, through in a remote or
pagbabasihan ng batas na collateral way, the public may benefit
gagawin ng law-making thereby.
body.) - (Like Marawi there is a great devastation
 (Lahat ng gagawin ng because of the insurgency or invasion that
congress ay naayon sa happened. Nasira yung mga poste ng
Constitution.) kuryente, pwede ba mag pondo yung
 gobyerno para gawin ng Meralco yung mga unang nag delegate? People is the owner
posteng nasira? Yes, because it will be a of power where the people delegated
public purpose whereas it will serve the the power to congress then the
people in Marawi. BUT if “it cannot be congress cannot be delegated to
exercised in aid of enterprises strictly others.
private” THEN NO, we cannot consider that
as a tribe as a public purpose because a  The principle in administrative law is that
private individual will be benefited by that congress cannot delegate its legislative
project or purpose. power to agencies. Rather, when instructs
agencies to regulate, it must give them an
 It must be the public people will “intelligible principle” on which to base
benefit from the projects. their regulations.
o TEST TO DETERMINE PUBLIC
PURPOSE: - (Hindi pwedeng idelegate ng congress ang
 Duty test – whether the pag gawa ng batas but the congress
thing to be furthered by the creates a law and that is a substantive
appropriation of public law.) The congress has no power to
revenue is something which implement the law, but they can make law.
is the duty of the state as a Dahil hindi naman ang congress ang mag-
government to provide. (Pag iimplement ng law, kahit hindi na sila ang
sinabing duty test kailangan gumawa ng rules and regulations nito.
yung purpose talaga is Papasok na dito ang government agencies,
governmental because all for example, Train Law a tax reform for
the government can enter acceleration and inclusion. Pag-pinasa ng
into a proprietary function. President, if that is a tax law it will be
 proprietary handled by Department of Finance that
function is one that a will be cascade to Bureau of Internal
private entity can Revenue (BIR) if internal tax or Bureau of
perform and is not Customs if external tax.
uniquely for the
benefit of the Exception:
general public. a. Article IV, Section 28 (2) Consti 1987 –
 Kung proprietary involves the delegation to the President to
function yan ay hindi fix tariff rates, import and export quotas,
yan governmental tonnage and wharfage dues and another
then that could not be duties and imports.
a public purpose. b. Article X, Section 5 – This is the power of
taxation of LGUs to create their own
 Promotion of general sources of revenues, levy taxes, fees and
welfare test – whether the charges.
proceeds of the tax will c. Delegation to Administrative Agencies
directly promote the welfare – in the implementation or tax
of the community in equal administration
measure. (National Taxation d. People’s initiative and referendum
= Philippines; Local Taxation under RA 6735 – The power of the people
= Municipal) under a system of initiative and referendum
to directly propose, enact, approve or
2. The power to tax, being essentially reject, in whole or in part, the Constitution,
legislative, cannot be delegated. laws, ordinances, or resolutions passed by
 “delegate potestas non potest any legislative body upon compliance with
delegari” means has been delegated the requirements of the Act.
cannot be redelegated. (This all about the
Delegation, bakit hindi pwedeng ideligate 3. The power to tax is limited to the
ng congress ang power to tax, sino ba yung territorial jurisdiction of the sovereign
unang nag utos sa congress) Sino yung state.
  Situs or territoriality, as a rule, states that
the taxing power cannot go beyond the  International Friendship whereas, “hindi mo
territorial limit of the taxing authority. ako pwedeng i-tax, hindi rin kita pwedeng i-
 The power of taxation is limited only within tax.”
the boundaries of territory of the states.  Par in parem non habet imperium =
The states cannot exercise its power of equals have no sovereignty over each other
taxation outside its territory. If the subject means is a general principle of international
of taxation is found abroad, then, the states law, forming the basis of state immunity.
could not anymore tax that. (If the subject Because of this principle jurisdiction over
of taxation is found abroad then the states another sovereign state. The power of
could not tax anymore. taxation is imposed only within the state.
The state could not tax another sovereign,
Exception: when the states invoke personal
under the principles of international law of
jurisdiction, like the case of resident citizens
which we adhere.
whose income derived about are taxed in the
Philippines, Subject to tax credits. Exception to the
 This is on the basis of Article II, Section 2.
exception, Income OFWs and Seaman.
o “The Philippines renounces war as
The states cannot tax the subjects or an instrument of national policy,
objects outside the jurisdiction of the adopts the generally accepted
Philippines under the 1987 Jurisdiction. principles of international law as
part of the law of the land and
 E.g. Personal Law (Personal Jurisdiction) na adheres to the policy of peace,
kahit outside the Philippines na yung equality and justice.”
subject or yung object but the owner of
that object still a resident of the Philippines,  Following the International comity, no law
hence, the Philippines still has the authority may be passed imposing tax on:
to tax the individual. E.G. Manny Paquiao. 1. Income of foreign ambassadors
Sa personal jurisdiction is kahit saan 2. Real property tax on foreign
pumunta yung tao hawak pa rin sya ng embassies
power of tax ng Pilipinas.
 E.g. The government cannot tax the law on
 E.g. Immigrants non-resident citizen they foreign embassies as they are not actually
already leave the country, therefore, hindi part of the Philippines as they are just
na sila babalik sa Pilipinas. extension of their mother country.
Geographically speaking, yung mga
 E.g. Seaman and OFWs they considered as embassies na nasa Philippines pero
non-resident citizens, therefore, they are legally speaking hindi sila Philippine
only taxable when their income inside of territory.
the Philippines.
5. The government exercising
 Golden Rule: Pag nasaloob lang ng governmental/sovereign functions is
Pilipinas pwedeng i-tax exception not taxed. Exemption of government
Personal Jurisdiction; Exception from entities, agencies and
the exception OFWs and the Seamans. instrumentalities.

4. A sovereign state cannot exercise  An instrumentality is an organization

jurisdiction over another sovereign created by or pursuant to state statute and
state. operated for public purposes. Generally, an
 Limitation base on the International instrumentality performs governmental
Community - Respect afforded by one state functions but does not have the full powers
to another by virtue of the principle of of a government, such as police authority,
sovereignty (a sovereign state cannot taxation, and eminent domain.
exercise jurisdiction over another  It is always the people can give taxes so
sovereign state. that the government can operate. NOT
 government is to be charged of taxes Cross). Some GOCCs are only granted
itself. certain exemptions and others none at all.
 The government exercising
governmental/sovereign functions is not 6. Prohibition against double taxation.
taxed. But when the government  What the law prohibits is the imposition of
agency exercises proprietary two taxes on the same subject matter, for
functions, taxation is the rule. If gusto the same purpose, by the same taxing
kumita ng government, hindi regulation on authority, within the same jurisdiction and
general welfare yung purpose, therefore, during the same taxing period; double
government enters with a private entity. taxation must be off.
 E.g. Cedula has 3 taxes: local tax, real
 BASTA HINDI PUBLIC YUNG PURPOSE property tax, and income tax. Where local
IT IS NOT EXCEMPTED – THEY SHOULD taxes were collected by local government
BE TAXABLE. and the income tax collected by BIR or
national government. On the other hand,
 In the Philippines Government-Owned real property tax is also collected by the
and Controlled Corporation (GOCCs’) local government. So technically, in Cedula
are corporation which are generally created we can say that there is a Doble taxation
through legislation. They may be on part of real property taxing as they
classified into two principal types: collect real property tax and local tax at the
o Corporations which are wholly same time with the same authority and the
owned by the government (e.g. same purpose.
Philippine Heart Centre and National
Food Authority) Summary in Inherent Limitations on the power of
o Those which operate under the taxation
government control and with 1. Public Purpose
private sector capitalization in the 2. Within territorial jurisdiction
Philippine National Oil 3. Non-delegation on all taxing power
Company/PNOC.) 4. Non-taxability of government agencies
5. International Comity
 On account of their socio-economic 6. Double Taxable
development objectives, GOCCs were
granted tax exemption privileges in their
respective charters or through special laws.
The tax privileges range from total
exemption from all taxes (national and
local), duties, fees, charges and
assessments to exemption from particular
types of taxes such as real property tax.

 The grant of tax exemption privileges is

premised on the need to free GOCCs
resources from the financial burden of
taxation to allow them to use such
resources in the further pursuit of their
objectives. Also, in cases where other
financial support to GOCCs may be
wanting, tax exemption privileges tend to
augment the same.

 Among the GOCCs which are currently

enjoying tax exemption privileges, some
are granted a broad provision of
exemptions from all nation taxes (e.g. GSIS,
SSS, PhilHealth, and Philippine National Red