Nature of taxation

Taxation is both inherent and legislative in nature. What does this mean?

It is inherent, being one of the three (3) inherent powers of a sovereign; others are power of eminent domain and police power. The mere existence of the State justifies the collection of taxes because tax guarantees its existence.

Another reason why it is called inherent is that it can exist even without a constitutional grant. The 1987 Constitution does not give the Philippine government the power of taxation because there is no need to do so. However, it does confer a power of taxation to local government units under Article X.

On the other hand, it is legislative in nature because law must set determine the coverage, object, nature, extent and situs of the tax. This, however, does not mean that taxation cannot exist without law. As an inherent power, it does exist without legislation but legislation is required to set parameters in the imposition of tax. The Executive Branch collects tax but it cannot do so without a law requiring it. Thus, taxation is inherent and legislative. (G.R. No. L‐31156)

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