Prohibition Against Imprisionment For Non-Payment of Poll Tax

PROHIBITION
AGAINST
IMPRISIONMENT
FOR NON-
PAYMENT OF
POLL TAX
“No person shall be imprisoned for debt or non-payment of a

poll tax.”
Prohibition against impairment
of obligation of contracts
• Sec. 10, Article III, Constitution.

– “No law impairing the obligation of contracts shall be
passed.”
• The obligation of contract is impaired when its
term or conditions are changed by law or by
party without the consent of the other, thereby
weakening the position of rights of the latter.
Prohibition against impairment
of obligation of contracts
• Example: When a tax exemption based on a

contract entered into by the government is
revoked by the latter through a later taxing
statute.
Prohibition against infringement
of religious freedom
• Sec. 5, Article III, Constitution.

– “No law shall be made respecting an
establishment of religion, or prohibiting the
free exercise thereof. The free exercise
and enjoyment of religious profession and
worship, without discrimination or
preference, shall forever be allowed. x x x“
• It has been held that the imposition of license
or permit fees on the distribution and sale of
Bibles and other religious literature by a non-
stock, non-profit religious organization
violates the above constitutional guarantee of
the free exercise and enjoyment of religious
profession and worship which carries with it
the right to disseminate religious beliefs and
information because such fees, in effect,
operate as a condition for the exercise of
• (cont.) religious freedom. But a tax imposed
on the scale of such religious materials is
valid as it operates only after the activity
(sale) taxed is done or completed.
Prohibition against appropriation
for religious purpose
• Sec. 29, Article VI, Constitution
– “No public money or property shall be
appropriated, applied, paid, or employed, directly
or indirectly, for the use, benefit, or support of any
sect, church, denomination, sectarian institution,
or system of religion, or of any priest, preacher,
minister, or other religious teacher or dignitary as
such, except when such priest, preacher, minister,
or dignitary is assigned to the armed forces, or to
any penal institution, or government orphanage or
leprosarium.”
Prohibition against appropriation
for religious purpose
• This limitation is based on the requirement

that taxes can only be levied for a public
purpose. The legislative body is without
power to appropriate funds for a private
purpose.
Prohibitions against taxation of
certain entities and properties
• Sec. 28, Article VI, Constitution
– “Charitable institutions, churches and
parsonages or convents appurtenant thereto,
mosques, non-profit cemeteries, and all lands,
buildings, and improvements actually, directly,
and exclusively used for religious, charitable
or educational purposes, shall be exempt
from taxation.”
Prohibitions against taxation of
certain entities and properties
• The exemption covers only property and not
other taxes.
• The test of the exemption is the use of the
property and not ownership.
• Thus, a property leased by the owner to another
who uses it exclusively for charitable purposes is
exempt from property tax but the owner is
subject to income tax.
Prohibition against taxation of
non-stock, non-profit educational
institutions
• Sec. 4 (3, 4), Article XIV, Constitution
– “All the revenues and assets of non-stock, non-
profit educational institutions used actually,
directly, and exclusively for educational
purposes shall be exempt from taxes and duties.
x x x”
– “Subject to conditions prescribed by law, all
grants, endowments, donations, or contributions
used actually, directly, and exclusively for
educational purposes shall be exempt from tax.”
Prohibition against taxation of
non-stock, non-profit educational
institutions
• The exemption covers income, property,
donor’s and donees’ taxes and customs duties.
• Congress is authorized to grant similar
exemptions to proprietary educational
institutions subject to limitations provided by law
including restrictions on dividends and
provisions for reinvestments.
• The restrictions are designed to ensure that the
tax exemption benefits are used for educational
purposes.
Other constitutional limitations
1. Granting of tax exemption
– with respect to this limitation, the Constitution
provides that “No law granting any tax exemption
shall be passed without the concurrence of a majority
of all the members of the Congress” [Sec. 28 (4),
Article VI].
– This requirement is obviously intended to prevent
indiscriminate grant of tax exemptions.
2. Veto of appropriation, revenue, or tariff bills
– “The President shall have the power to veto any
particular item or items in an appropriation, revenue,
or tariff bill, but the veto shall not affect the item or
items to which he does not object.” [Sec. 27 (2),
Article VI]
3. Non-impairment of the jurisdiction of the
Supreme Court
– “The Congress shall have the power to define,
prescribe, and apportion the jurisdiction of the
various courts but may not deprive the Supreme
Court of its jurisdiction enumerated in Section 5
hereof”; (Sec. 2, Art. VIII)
– “The Supreme Court shall have the following
powers: x x x [r]eview, revise, reverse, modify, or
affirm . . . Final judgments and orders of lower
courts in . . . all cases involving the legality of any
tax, impost, assessment, or toll, or any penalty
imposed in relation thereto.” [Secs. 1, 5(2b), Art.
VIII]
3. Non-impairment of the jurisdiction of the
Supreme Court
– Under the two provisions, Congress cannot take
away from the Supreme Court the power given
to it by the Constitution as the final arbiter of tax
cases.
OUTLINE OF REPORT
KRIZZA MAE HEYRANA
Requirement of Public Purpose
Prohibition against delegation of taxing power

Exemption of government agencies or
instrumentalities
Limitation of international comity
Limitation of territorial jurisdiction

REQUIREMENT OF
PUBLIC PURPOSE
MEANING
PUBLIC PURPOSE
=
GOVERNMENTAL
PURPOSE
THE BEST TEST OF RIGHTFUL
TAXATION IS THAT THE PROCEEDS OF
THE TAX MUST BE USED:
(a) For the support of the government, or
(b) For some of the recognized objects of

government
(c) To promote the welfare of the community

REASON FOR
THE RULE
Since the government is established for public
purpose, public money can only be spent for
the same purpose.
EFFECT OF
INCIDENTAL
BENEFIT TO
PRIVATE
INTEREST
AIDS TO VICTIMS OF PUBLIC
CALAMITY
THE TEST IS NOT AS TO WHO RECEIVES THE

MONEY, BUT THE PURPOSE FOR WHICH IT IS
PAYMENT OF PENSIONS
EXPENDED.
BONUSES FOR SERVICE RENDERED
BY PUBLIC OFFICERS AND
EMPLOYEES
PROHIBITION AGAINST
DELEGATION OF
TAXING POWER
The power of taxation being purely
legislative, Congress cannot delegate the
power to others. This limitation arises
from the doctrine of separation of powers
which underlines our system of
government. There are, however,
exemptions to the rule, namely:
(1) DELEGATION TO THE PRESIDENT
Our constitution expressly allows the lawmaking body to authorize

the President to fix within specified limits, and subject to such
limitations and restrictions as it may impose, tariff rates, import and
export quotas, tonnage and wharf age dues, and other duties or
imports.
(2) DELEGATION TO LOCAL GOVERNMENTS
Under the new Constitution, each local government unit is now

expressly given the power to create its own sources of revenue and
to levy taxes subject, however, to such guidelines & limitations as
may be provided by law
(3) DELEGATION TO ADMINISTRATIVE AGENCIES
There are certain aspects of the taxing process that are not
legislative and they may, therefore, be vested in an administrative
body, such as the valuation of property for taxation pursuant to the
fixed rules and the assessment and collection of taxes.
EXEMPTION OF
GOVERNMENT
AGENCIES OR
INSTRUMENTALISTIES
INSTRUMEN
TALITIES OF
THE
GOVERNME
NT ARE
GENERALLY
EXEPMT
FROM
TAXATION,
UNLESS
CONTROLLED CORPORATIONS
(Such as PNB) EXERCISING
PROPRIETARY FUNCTIONS, ARE
SUBJECT TO TAX IN THE
ABSENCE OF TAX EXEMPTION
PROVISIONS IN THEIR
CHARTERS.
LIMITATION OF
INTERNATIONAL
COMITY
UNDER INTERNATIONAL
COMITY, THE PROPERTY OF A
FOREIGN STATE OR
GOVERNMENT MAY NOT BE
TAXED
This principleBY ANOTHER.
is based on the sovereign
equality among states under international law by
virtue of which one state cannot exercise its
sovereign powers over another; and the rule of
international law that a foreign government may
not be sued without its consent so that it is
useless to assess the tax, since anyway it
cannot be collected.
LIMITATION OF
TERRITORIAL
JURISDICTION
PROPERTY LYING OUTSIDE ITS
BORDERS OR LAY A
PRIVILEDGE TAX UPON THE
EXERCISE OR ENJOYMENT OF A
RIGHT OR PRIVILEDGE IN
ANOTHER STATE.
TAX EVASION AND
TAX AVOIDANCE
TAX EVASION
is the use by the taxpayer of illegal or
fraudulent means to defeat or reduce the
payment of a tax.
Ex. Deliberate failure to report taxable
income or property; deliberate reduction
income that has been received.
TAX AVOIDANCE
is the use by the taxpayer legally
permissible means or methods in order to avoid
or reduce tax liability. It is not punishable by
law.
Ex. Person refrains from engaging in some

activity or enjoying some privilege in order to
avoid the incidental taxation,
A man may change the form of his property by
butting his money into non-taxable securities
COMPARISON
Tax evasion should be applied to the
escape from taxation accomplished by
breaking the letter of the tax law. While tax
avoidance, on the other hand, covers
escape, accomplished by legal means
which may be contrary to the intent of the
sponsors of the tax law but nevertheless do
not violate the letter of the law.
Reference:
• Leon, H. S. (2012). Taxation. Manila: Rex.

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PROHIBITION

“No person shall be imprisoned for debt or non-payment of a

• Sec. 10, Article III, Constitution.

• Example: When a tax exemption based on a

• Sec. 5, Article III, Constitution.

• This limitation is based on the requirement

Requirement of Public Purpose

Prohibition against delegation of taxing power

Limitation of territorial jurisdiction

(b) For some of the recognized objects of

(c) To promote the welfare of the community

THE TEST IS NOT AS TO WHO RECEIVES THE

Our constitution expressly allows the lawmaking body to authorize

Under the new Constitution, each local government unit is now

Ex. Person refrains from engaging in some

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