TAXATION: Tax vs. Other impositions

 

16.   Distinguish the following from each other:

a.       Tax from toll;

	TAX	TOLL FEE
Imposed by	State	Private persons
Purpose	Raise Revenues	Reimbursement of costs and expenses incurred in the construction of toll ways , and to assure reasonable margin of income
Basis	State’s sovereign power	Attribute of ownership

 

b.      Tax vs. penalty

 

	TAX	PENALTY
Purpose	To raise revenue	To regulate conduct
Imposed by	State	State, private individuals, entities

 

c.       Tax vs. special assessment -

 

	TAX	SPECIAL ASSESSMENT
Imposed on	Persons, Properties, etc.	Only on land
Why imposed	Regardless of public improvement	Public improvement benefits the land and increases its value ●     Benefit is a condition sine qua non for special assessment
Purpose	Support of government	Contribution to cost of public improvement
When impose	Regular exaction	Exceptional as to time and locality
Basis	Necessity	Benefits obtained

 

d.      Tax vs. license or permit fees

 

	TAX	LICENSE FEE
Source	Taxing power	Police Power of the State
Purpose	Raise Revenue	Regulation
Object	Persons, property and privilege	Right to exercise a privilege
As to the amount	No limit	Only necessary to carry out regulation

 

e.      Tax from debt

Reminders: read the cases

	TAX	DEBT
Basis	Based on law	Based on contract
W/N it is assignable	Cannot generally be assigned	assignable
Payment	Generally payable in money	Maybe paid in kind
As to whether nonpayment will lead to imprisonment	Imprisonment is a sanction (xpn: poll tax)	Imprisonment is not a sanction for nonpayment

Tax is not an ordinary debt. Ordinary debts are governed by the Civil Code.

CIR v. Pineda -- to expedite collection of taxes; Gov’t can choose to assessed the entire tax deficiency against one heir since the heirs are considered solidarily liable

Domingo v. Garlitos - the State has become an ordinary creditor so set-off was allowed; State has already appropriated money to pay the services of Mr. Scott Price thus they have become mutual debtors and creditors of each other

Republic v. Mambulao - a tax cannot be set off with another tax

Francia v. IAC - set off not allowed because just compensation is a sovereign obligation the tax assessed was only a municipal tax

17.   What is the importance of a tax being distinguished from other impositions?

It is important to differentiate taxes from other exactions especially when it comes to problem/issues on double taxation, tax exemptions, jurisdiction of the CTA, and taxpayer remedy (e.g. Refund claims).

E.G.

1.)   If an exaction is not a tax, then the defense of a taxpayer of double taxation will fail.

Also, a tax-exempt individual or corporation is generally only exempt from paying taxes; hence if the exaction is not a tax, then the individual or corporation must still pay the exaction

18.   What is the rule of set-off of taxes with other debts?

GR: No set off or compensation is admissible against demands for taxes levied for general or local purposes
REASON: Taxes are not in the nature of contract between parties; the government and the taxpayer are not mutually creditors and debtors of each other and the claim for taxes is not such a debt, demand, contract or judgment as is allowed to be set off

XPN: when both the claims of the government and the taxpayer against each other have already become due and demandable as well as fully liquidated