nTAXATION IN GENERAL

* Taxes have been defined by an eminent authority as “the enforced proportional contributions from persons and property, levied by the state by virtue of its sovereignty for the support of government and for all public needs.

* Taxation is a mode of raising revenue for public purposes.

Limitations on the power to tax
(a) Inherent Limitations 1. The levy must be for a public purpose; 2. Non-delegation in general of the power to tax – except in matters referring to collection and enforcement; 3. Exemption from taxation of government entities; and 4. The levy of the tax within territorial limits (subject to treaty stipulations) for the exercise of “effective jurisdiction” (the problem of situs in taxation).
(b) Constitutional limitations protection of the laws 1. Due process of law and equal and equal protection of the laws 2. No imprisonment for non-payment of a poll tax 3. Non-impairment of contracts 4. Power of the Prime Minister to veto any particular items in a revenue or tariff bill 5. Uniformity in taxation 6. Authority of prime Minister to fix within specified limits, tariff rates 7. Exemption of charitable institutions, churches, etc. 8. Non-impairment of the jurisdiction of Supreme Court on tax cases

Classifications of taxes:
(a) According to the purposes for which it is applied 1. General – imposed without predetermined purpose and therefore, may be appropriated for general public purposes. 2. Special – imposed under special laws and the tax collected may not be appropriated or diverted to some purposes other than those provided in the special law. (b) According to who bears the burden of taxation 1. Direct – those collected or demanded from subjects desired or intended by law to be liable, like income tax, etc. 2. Indirect – imposed by law on certain persons