Sound tax system, principles

The three (3) principles of a sound tax system are fiscal adequacy, administrative feasibility and theoretical justice.

Under the principle of fiscal adequacy, revenue raised must be sufficient to meet the needs of the public and the government. If collection goes beyond or below the amount needed, there is a violation of this principle.

Under the principle of administrative feasibility, the tax system should be capable of being effectively administered and enforced with the least inconvenience to the taxpayer. Non-observance of the canon, however, will not render a tax imposition invalid except to the extent that specific constitutional or statutory limitations are impaired. (G.R. No. 193007)

Under the principle of theoretical justice, the taxpayers' ability to pay the tax must be taken into consideration. "The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation." (Art. VI, Sec. 28(1), 1987 Constitution)