General Principles

1.Taxes vs Set Off/Legal Compensation

• Article 1278. Compensation shall take place when two persons, in their own right, are creditors and
debtors of each other. (Civil Code of the Ph) Compensation is a civil law concept and, as a rule, it
does not apply in the realm of tax law.
• There are 3 reasons why this concept does not apply in taxation. First is a category of obligation.
Second is category of law. Third is public policy.

Category of law Category of obligation Public Policy

The applicable laws are different. What is referred to in Art 1278 is Taxes are the lifeblood of the
Compensation is governed by the ordinary obligations where there government. They are an integral
Civil Code of the Ph but taxation, is a creditor and a debtor and and independent obligation.
its collection and other aspects both of them are creditors and Their speedy collection and their
thereof are governed by the debtors of each other. In the case availability are an imperious
National Internal Revenue Code of tax laws, the government and need.
(NIRC) as amended and other tax the taxpayers are not creditors
laws. and debtors because tax is not a
debt.

2. Equitable Recoupment
Doctrine of equitable recoupment.
It is a principle w/c allows a taxpayer, whose claim for refund has been barred due to prescription, to recover
said tax by setting off the prescribed refund against a tax that may be due and collectible from him. Under
this doctrine, the taxpayer is allowed to credit such refund to his existing tax liability. However, the SC
rejected this doctrine in Collector v. UST (GR L-11274), since it may work to tempt both parties to delay
and neglect their respective pursuits of legal action w/in the period set by law.

3. Theory and Basis of Taxation

• The power of taxation proceeds upon the theory that the existence of government is a necessity;
that it cannot continue without means to pay its expenses; and that for these means, it has a right to
compel all its citizens and property within its limits to contribute.
• The basis of taxation is found in the reciprocal duties of protection and support between the State
and its inhabitants. In return for his contribution, the taxpayer received benefits and protection from
the government. This is the so-called “benefits received principle.”
4.Lifeblood Theory 5.Necessity Theory 6.Benefits Protection Theory
(Symbiotic Relationship
Doctrine)
Without revenue raised from The exercise of the power to tax It involves the power of the State
taxation, the government will not emanates from necessity, to demand and receive taxes
survive, resulting in detriment to because without taxes, based on the reciprocal duties of
society. Without taxes, the government cannot fulfill its support and protection between
government would be paralyzed mandate of promoting the the State and its citizen.
 for lack of motive power to general welfare and well being of
activate and operate it. (CIR v. the people. (CIR v. Bank of Every person who is able must
Algue, Inc., G.R. No. L-28896, Philippine Islads, G.R. No. contribute his share in the burden
February 17, 1988, 158 SCRA 9) 134062, April 17, 2007, 521 of running the government.
SCRA 373) The government for its part is
expected to respond in the form
of tangible and intangible
benefits intended to improve the
lives of the people and enhance
their material and moral values.
(CIR v. Algue, G.R. No. L-
28896, February17, 1988)

Special benefits to taxpayers are

not required. A person cannot
object to or resist the payment of
taxes solely because no personal
benefit to him can be pointed out
arising from the tax. (Lorenzo v.
Posadas, 64 Phil. 353)

7.Jurisdiction over Subject and Objects

The power to tax can only be exercised w/in the territorial jurisdiction of a taxing authority, except when
there exists privity of relationship between the taxing state and the object of tax.

8. Power to Tax involves the Power to Destroy

In McCulloch v. Maryland Chief Justice Marshall declared that the power to tax involves the power to
destroy. This maxim only means that the power to tax includes the power to regulate even to the extent of
prohibition or destruction of businesses. The reason is that the legislature has the inherent power to
determine who to tax, what to tax and how much tax is to be imposed. Pursuant to the regulatory purpose
of taxation, the legislature may impose tax in order to discourage or prohibit things or enterprises inimical
to the public welfare.

9. Kinds of Double Taxation

Direct Double Taxation (Strict Sense) Indirect Double Taxation (Broad Sense)
The taxpayer is taxed twice by the same taxing This extends to all cases in which there is a burden
authority, within the same taxing jurisdiction, for of two or more impositions. It is the double taxation
the same property and same purpose. other than those covered by direct double taxation.
10. Kinds of Tax Exemptions
Individual Tax Exemptions
Minimum Wage PWDs Senior Citizens OFWs
Earners
Those earning the PWDs are entitled to Individuals who are at OFWs are generally
statutory minimum special deductions in least 60 years old and exempt from paying
wage are exempt from addition to the basic have retired are exempt Philippine income tax
income tax. This personal exemptions from tax on certain on income earned
extends to holiday pay, granted to all individual types of income, like abroad.
overtime pay, and other taxpayers. pensions.
monetary benefits that
do not exceed the
established threshold.

Corporate Tax Exemptions

GOCCs Educational Institutions Religious Organizations
Most GOCCs are exempt from Educational institutions which Income derived from activities
corporate income tax, but not all. are non-profit are exempted from related to the exercise of their
tax on income used for functions is tax-exempt.
educational purposes.

Special Laws and Treaties

Investment Incentives Treaties
Various special economic zones and industries The Philippines has tax treaties with several
targeted for development offer tax exemptions and countries, potentially exempting foreign nationals
other fiscal incentives to entice investment. from certain taxes or allowing them to avail of
reduced tax rates.

11. Principles/Interpretations/Construction on Tax Laws and Tax Exemptions

• Statutes levying taxes or duties are to be construed strongly against the Government and in favor
of the subject or citizens, because burdens are not to be imposed or presumed to be imposed beyond
what statutes expressly and clearly declare. No person or property is subject to taxation unless they
fall within the terms or plain import of a taxing statute.

• Laws granting tax deductions, refunds, exemption are construed in strictissimi juris against the
taxpayers and liberally in favor of the taxing authority. Any claim for tax exemption from tax
statutes is strictly construed against the taxpayer and it is contingent upon taxpayer to establish a
clear right to tax exemption. Tax exemptions are strictly construed against the grantee and liberally
in favor of the taxing authority. They are looked upon with disfavor. They are held strictly against
the taxpayer and if not expressly mentioned in the law, must at least be within its purview by clear
legislative intent. However, when Congress grants an exemption to a national government
instrumentality from local taxation, such exemption is construed liberally in favor of the national
 government instrumentality. The reason for the general rule does not apply in the case of
exemptions running to the benefit of the government itself or its agencies. In such case the practical
effect of an exemption is merely to reduce the amount of money that must be handled by
government in the course of its operations. For these reasons, provisions granting exemptions to
government agencies may be construed liberally, in favor of non-tax liability of such agencies. For
tax rules and regulations to be valid, an administrative rule or regulation must conform with, and
not contradict, the provisions of the enabling law. An implementing rule or regulation cannot
modify, expand, or subtract from the law which it is intended to implement. Any rule that is not
consistent with the statute itself is null and void

12. Doctrines in Taxation

Lifeblood Theory Necessity Theory Benefits Received Doctrine of Symbiotic

Principle Relationship
Taxes are the lifeblood Taxation is a power It is said that taxes are Without taxes, the
of government and their emanating from what we pay for government would be
prompt and certain necessity. Tax is a civilized society paralyzed for lack of the
availability is an necessary burden to motive power to
imperious need. For preserve the State's activate and operate it.
without taxes, the sovereignty and a Hence, despite the
government can neither means to give the natural reluctance to
exist nor endure. Taxes citizenry an army to surrender part of one's
should be collected resist an aggression, a hard-earned income to
without unnecessary navy to defend its the taxing authorities,
hindrance. However, shores from invasion, a every person who is
such collection should corps of civil servants to able to must contribute
be made in accordance serve, public his share in the running
with law as any improvements designed of the government. The
arbitrariness will negate for the enjoyment of the government, for its part,
the very reason for the citizenry and those is expected to respond
Government itself which come within the in the form of tangible
State's territory, and and intangible benefits
facilities and protection intended to improve the
which a government is lives of the people and
supposed to provide enhance their moral and
material values. This
symbiotic relationship
is the rationale of
taxation and should
dispel the erroneous
notion that it is an
arbitrary method of
exaction by those in the
seat of power

13. Prospectivity of Tax Laws

It is prospective. Laws shall have no retroactive effect, unless the contrary is provided.
1. Prescriptability/ Imprescriptability of Taxes
Prescriptability Imprescriptability
• As a general rule, internal revenue taxes • The doctrine of imprescriptibility means
shall be assessed within three (3) years that the government's right to assess and
after the last day prescribed by law for the collect taxes does not prescribe or become
filing of the return provided that in case obsolete over time unless specified by tax
where a return is filed beyond the period law.
prescribed by law, the three (3)-year period • It is a well-settled doctrine both in this
shall be counted from the day the return jurisdiction as well as in that of the United
was filed.'” States, that, unless expressly provided by
• By way of exception, an assessment may law, the statutes of limitation do not run
be made beyond the three-year prescriptive against the State. This principle is
period in the following cases: applicable to actions brought for the
a. In the case of a false or fraudulent return collection of taxes
with intent to evade tax or of failure to file
a return, the assessment may be made at
any time within ten (10) years after the
discovery of the falsity, fraud or omission;
or
b. If before the expiration of the three-year
prescriptive period for the assessment of
the tax, both the Commissioner and the
taxpayer have agreed in writing to its
assessment after such time. The period so
agreed upon may be extended by
subsequent written agreement made before
the expiration of the period previously
agreed upon."

2. Principle of Exhaustion of Administrative Remedies in Taxation

Under the doctrine of exhaustion of administrative remedies, before a party is allowed to seek the
intervention of the court, he or she should have availed himself or herself of all the means of administrative
processes afforded him or her. Section 228 of the Tax Code requires taxpayers to exhaust administrative
remedies by filing a request for reconsideration or reinvestigation within 30 days from receipt of the
assessment.

3. Double Taxation
Double taxation occurs when the same subject or object of taxation is taxed twice when it should be taxed
but once. Double taxation is prohibited when it is an imposition of taxes on the same subject matter, for the
same purpose, by the same taxing authority within the same jurisdiction, during the same taxing period,
with the same kind or character of a tax (84 C.J.S.131-132). It is permissible if taxes are of different nature
or character, or the two taxes are imposed by different taxing authorities (Villanueva v. City of Iloilo, G.R.
No. L-26521, December 28,1968, 26 SCRA 578).
 4. Direct Double Taxation 5.Indirect Double Taxation
involves the imposition of two taxes on the same arises when some elements of direct double
subject matter, meeting specific criteria taxation are absent, often necessitating methods for
elimination through tax treaties

6. Tax Pyramiding

• A tax should not be imposed upon another tax. (People v Sandiganbayan GR 152532)
• Tax pyramiding occurs when the same final good or service is taxed multiple times along the
production process. This yields vastly different effective tax rates depending on the length of the
supply chain and disproportionately harms low-margin firms.
1. Modes of Eliminating Double Taxation
a) Tax deduction whereby an amount is subtracted from the gross amount
b) Tax exemption whereby a person is given immunity from tax laws
c) Tax credit whereby a person is allowed to deduct an amount from his tax liability
d) Imposition of a lower rate

2. Tax Exemption
Tax Exemption is the legal right of an organization or an individual to get an exemption or reduction to
the taxes they owe to the Bureau of Internal Revenue (BIR) – provided that they meet certain
requirements. Those entitled to tax exemptions are then issued with a Certificate of Tax Exemption (CTE)
as proof that they are not required to pay certain taxes.
Tax Exemption Qualifications in the Philippines
The Tax Code of the Philippines lists the following individuals or organizations that are qualified for tax
exemption:
1. Individuals with no income, minimum wage earners, and those whose taxable income does not
exceed PHP 250,000.
2. Non-stock, nonprofit educational institutions.
3. Non-stock, nonprofit corporations that fall under Section 30 of the National Internal Revenue
Code.
4. Cooperatives registered in the Cooperative Development Authority (CDA) which transact
business with members only.
5. CDA-registered cooperatives which transact business with members and non-members, with
accumulated reserves and undivided net savings of not more than PHP 10 million.

3-5. Express; Implied or by Inference; Contractual

Kinds of Tax Exemption:

As to Form
Express Implied/Inference Contractual
Expressly granted by the When particular persons, Are those agreed to by the
Constitution, statutes, treaties, properties, or exercise are taxing authority in contract
franchises or similar legislative deemed exempt as they fall lawfully entered into by them
acts. outside the scope of the taxing under enabling laws.
provision itself.
1.Tax Credit

• refer to the amount due to a taxpayer resulting from an overpayment of a tax liability or erroneous
payment of a tax due.
• An amount subtracted from an individual's or entity’s tax liability (tax due) to arrive at the tax
liability still due
• Reduces tax Liability

2.Tax Deduction

• an amount subtracted from the gross income to arrive at taxable income.

• Reduces taxable income

3.Tax Discount

• refers to a reduction in the amount of tax owed, often granted as an incentive or benefit under
specific conditions. This can include discounts for early payment of taxes, tax incentives for certain
industries, or exemptions for particular types of income.

4.Tax Treaties

• Sets out the respective rights to tax of the state of source (situs) and the state of residence w/ regard
to certain cases, an exclusive right to tax is conferred on one of the contracting states; however, for
other items of income or capital, both states are given the right to tax, although the amount of tax
that may be imposed by the state of source is limited
• Applied whenever the state of source is given full or limited right to tax. The treaty makes it
incumbent upon the state of residence to allow relief in order to avoid double taxation
• The BIR issued RMO No. 1-2000, as amended by RMO No. 72-2010, requiring taxpayers to file
for a Tax Treaty Relief Application on or before the transaction date before availing of the
provisions of a tax treaty. However, as held by the SC, this administrative requirement cannot defeat
the right of any taxpayer entitled to the preferential rates in the tax treaty

5.Principle of Reciprocity

• refers to the concept that the tax privileges or exemptions granted to foreign individuals or entities
by the Philippines should be reciprocated by their home countries.
• Under this principle, if a foreign country provides tax benefits or exemptions to Philippine nationals
or entities, the Philippines may extend similar benefits to nationals or entities from that country.
1.Escape from Taxation
Shifting Capitalization Transformation Tax Avoidance Tax Exemption
the burden of the reduction in for manufacturers exploitation by the grant of immunity
payment is the price of the or producers, taxpayer of legally to particular
transferred from taxed object equal upon whom tax permissible persons or
the statutory to the capitalized are imposed, alternative tax corporations of a
taxpayer to value of future fearing the loss of rates or methods particular class
another without taxes the his market if he of assessing from a tax which
violating the law purchaser is should add to the taxable property persons or
(e.g., VAT); expected to be price, pays the tax or income, in corporations
called upon to and endeavor to order to avoid or generally within
pay. recoup himself by reduce tax the same rate or
improving his liability. taxing district
process of are obliged to pay.
production, Also known as
thereby producing “tax
his units at a minimization.”
lower cost. (e.g. utilizing all
permissible
allowable
deductions)

2. Shifting of Tax Burden

Forward Shifting Backward Shifting Onward Shifting
When the burden of tax is When the burden is transferred the tax is shifted two or more
transferred from a factor of from the consumer through the times either forward or
production through the factors of factors of distribution to the backwards
distribution until it finally settles factors of production
on the ultimate purchaser or
consumer.

3. Tax Avoidance

• a legal way for taxpayers to avoid paying taxes. They can do so by using the tax credits, deductions,
and exclusions that are part of the tax code to their advantage. Using these strategies can help them
either avoid paying taxes altogether or lower their tax liability.
4. Tax Evasion

• The crime of tax evasion is committed by a taxpayer who knowingly and willfully files a fraudulent
return with intent to evade and defeat a part or all of the tax (People v. Mendez, G.R. Nos. 208310-
11 & 208662, (March 28, 2023).
• Under Section 254 of the Tax Code, as amended (which penalizes tax evasion in general), it must
be proven that:
1) the accused is a registered taxpayer;
2) the source of income is proved; and
3) the income was not declared in the corresponding returns.
• Tax Evasion can be committed by “any person." Person here can mean a natural person or a juridical
person. Thus, there are two possible offenders in this crime: individuals or juridical persons. In the
case of corporations, Section 253 of the Tax Code states that the penalty shall be imposed on the
officers responsible for the violation.
1.Tax Evasion v Tax Avoidance
Tax Evasion Tax Avoidance
• Illegal • Legal
• A scheme used outside of those lawful • The tax saving device w/in the means
means and when availed of, it usually sanctioned by law
subjects the taxpayer to further or • This method should be used by the
additional civil or criminal liabilities taxpayer in good faith and at arm’s length
• Connotes the integration of three factors:
(1)The end to be achieved, i.e., the
payment of less than that known by the
taxpayer to be legally due, or the non-
payment of tax when it is shown that a tax
is due
(2)An accompanying state of mind which
is described as being “evil,” in “bad faith,”
“willful,” or “deliberate and not
accidental”
(3)a course of action or failure of action
which is unlawful
1.Tax Amnesty
Tax amnesty refers to the "absolute waiver by a sovereign of its right to collect taxes and power to impose
penalties on persons or entities guilty of violating a tax law. Tax amnesty aims to grant a general reprieve
to tax evaders who wish to come clean by giving them an opportunity to straighten out their records."
Simply put, it partakes of an absolute relinquishment by the government of its right to collect what is due
it and to give tax evaders who wish to relent a chance to start with a clean slate. (BIR vs Cagang GR 230104)

2. Compromise v Abatement

Compromise Abatement
• involves the payment of a certain • cancellation so there will be no payment of
percentage of the tax liability the tax liability
• an agreement between the taxpayer and the • diminution or decrease in the amount of
Bureau of Internal Revenue (BIR) to settle tax imposed, such that to abate is to
a tax liability for less than the full amount “nullify or reduce in value or amount
owed. • no mutual concessions between the
• It typically occurs when a taxpayer taxpayer and the CIR are made
demonstrates an inability to pay the full • It can be applied in situations where the tax
amount due, often due to financial is found to be erroneously assessed, where
hardship. The compromise must be there are legitimate reasons for non-
approved by the BIR and is intended to payment, or when the taxpayer has
resolve disputes amicably. provided sufficient justification.

3.Taxpayer’s Suit

• A taxpayer is allowed to sue where there is a claim that public funds are illegally disbursed, or that
the public money is being deflected to any improper purpose, or that there is wastage of public
funds through the enforcement of an invalid or unconstitutional law.
• A person suing as a taxpayer, however, must show that the act complained of directly involves the
illegal disbursement of public funds derived from taxation. He must also prove that he has sufficient
interest in preventing the illegal expenditure of money raised by taxation and that he will sustain a
direct injury because of the enforcement of the questioned statute or contract.
• for a taxpayer's suit to prosper, two requisites must be met:
(1) public funds derived from taxation are disbursed by a political subdivision or instrumentality
and in doing so, a law is violated or some irregularity is committed
(2) the petitioner is directly affected by the alleged act.

4. Nature of Taxation

• both inherent and legislative in nature

Inherent in Nature Legislative in Nature

• it is inherent, being one of the 3 inherent • because law must set determine the
powers of a sovereign; others are power coverage, object, nature, extent and situs
or eminent domain and police power. of the tax. This does not mean that
The mere existence of the State justifies taxation cannot exist w/o law
 the collection of taxes because tax • it does exist w/o legislation but
guarantees its existence legislation is required to set parameters
• it can exist even w/o a constitutional in the imposition of tax. The Executive
grant. The Constitution does not give the Branch collects tax but it cannot do so
PH government the power of taxation w/o a law requiring it
because there is no need to do so.
However, it does confer a power of
taxation to local government units under
Art X

5.It is inherently legislative

• Taxation is an inherent attribute of sovereignty. It is a power that is purely legislative. Essentially,

this means that in the legislature primarily lies the discretion to determine the nature (kind), object
(purpose), extent (rate), coverage (subjects) and situs (place) of taxation. It has the authority to
prescribe a certain tax at a specific rate for a particular public purpose on persons or things within
its jurisdiction. In other words, the legislature wields the power to define what tax shall be imposed,
why it should be imposed, how much tax shall be imposed, against whom (or what) it shall be
imposed and where it shall be imposed.

6.It is for a public purpose

A tax is for the public purpose where it is for the support of the government, or any of the recognized
object of the government, or where it will directly promote the welfare of the community in equal
measure

7.It is territorial in application

• Taxation is an act of sovereignty which could only be exercised within a country's territorial
limits. This is based on the theory that taxes are paid for the protection and services provided
by the taxing authority which could not be provided outside the territorial boundaries of the
taxing State.
• As a rule, the State's power to tax does not extend beyond its territorial limits. Case law holds
that "[i]f an interest in property is taxed, the situs of either the property or interest must be
found within the State. If an income is taxed, the recipient thereof must have a domicile within
the State or the property or business out of which the income issues must be situated within the
State so that the income may be said to have a situs therein. Personal property may be separated
from its owner and he may be taxed on its account at the place where the property is although
it is not a citizen or resident of the State which imposes the tax." This territorial limitation of
taxation is what necessitates the taxation of only income derived from sources "within" the
Philippines for non-resident aliens and foreign corporations

8.It is subject to international comity

• International comity is a principle of international law relating to rules of international courtesy,

etiquette, or good-will which are in fact, or which ought to be, observed by states in their mutual
 relations. Under international comity, a state must recognize the generally accepted tenets of
international law, among which are the principles of sovereign equality among states and of
their freedom from suit without their consent. This principle, therefore, limits the authority of
a government, i.e., the Philippine Government, to effectively impose taxes on a sovereign state
and its instrumentalities, as well as on its property held, and activities undertaken, in that
capacity
• Section 2, Article II of the Constitution provides that Philippines adopts the generally accepted
principles of international law as part of the law of the land and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity with all nations.

9.It is an exaction payable in money.

Taxation is generally considered an exaction payable in money. It is a compulsory financial charge
imposed by a government on individuals or entities to fund public services and activities. Taxes can
take various forms, including income tax, property tax, sales tax, and others, and they are typically
required to be paid in cash or cash equivalents. While some taxes may allow for non-monetary payments
in specific circumstances (such as through in-kind contributions), the standard practice involves
monetary payments.

10.It is subject to limitations and restrictions

• Inherent and Constitutional Limitations of Taxation

Public Purpose • The power to tax exists for the general
welfare; hence, implicit in its power is the
limitation that it should be used only for a
public purpose.
International Comity • Under international comity, a state must
recognize the generally accepted tenets of
international law, among which are the
principles of sovereign equality among
states and of their freedom from suit
without their consent. This principle,
therefore, limits the authority of a
government, i.e., the Philippine
Government, to effectively impose taxes
on a sovereign state and its
instrumentalities, as well as on its property
held, and activities undertaken, in that
capacity
Non-delegability of taxing power Exceptions:
• Delegation to Local Government Unit
• Delegation to the President
• Delegation to Specialized Administrative
Agencies
Exemption of the government • merely to reduce the amount of money that
has to be handled by the government in the
course of its operation
 • The government may choose to tax itself.
Nothing prevents Congress from decreeing
that even instrumentalities or agencies of
the government performing government
functions may be subject to tax.
Situs or territoriality • Taxation is an act of sovereignty which
could only be exercised within a country's
territorial limits. This is based on the
theory that taxes are paid for the protection
and services provided by the taxing
authority which could not be provided
outside the territorial boundaries of the
taxing State.

• Constitutional Limitations

Due process and Equal Protection No person shall be deprived of life, liberty, or
property without due process of law, nor shall any
person be denied the equal protection of the laws
Non-Infringement of Religious Freedom No law shall be made respecting an establishment
of religion or prohibiting the free exercise thereof.

Non-Infringement of Press Freedom No law shall be passed abridging the freedom of

speech, of expression, or of the press, or the right
of the people peaceably to assemble and petition
the government for redress of grievances.
Non-Impairment Clause No law impairing the obligation
of contracts shall be passed
Bills Shall Originate From the House of All appropriation, revenue or tariff bills, bills
Representatives authorizing increase of the public debt, bills of
local application, and private bills, shall originate
exclusively in the House of Representatives, but
the Senate may propose or concur with amendment
Uniformity and Progressivity of Taxation. The rule of taxation shall be uniform and equitable.
The Congress shall evolve a progressive system of
taxation
Exemption of Properties used for Religious, Charitable institutions, churches and personages or
Charitable, and Educational Purpose. 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
Exemption of Non-stock, Non-profit Educational All revenues and assets of non-stock, non-profit
Institutions educational institutions used actually, directly, and
exclusively for educational purposes shall be
exempt from taxes and duties. Upon the dissolution
or cessation of the corporate existence of such
institutions, their assets shall be disposed of in the
manner provided by law. Proprietary educational
 institutions, including those cooperatively owned,
may likewise be entitled to such exemptions,
subject to the limitations provided by law,
including restrictions on dividends and provisions
for reinvestment. 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
Grant of Tax Exemption No law granting any tax exemption shall be passed
without the concurrence of a majority of all the
Members of the Congress
President's Veto Power 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
Delegation to President The Congress may, by law, 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
wharfage dues, and other duties or imposts within
the framework of the national development
program of the Government
Tax Levied for Special Purpose All money collected on any tax levied for a special
purpose shall be treated as a special fund and paid
out for such purpose only. If the purpose for which
a special fund was created has been fulfilled or
abandoned, the balance, if any, shall be transferred
to the general funds of the Government
Delegation to Local Government Unit Each local government unit shall have the power to
create its own sources of revenues and to levy
taxes, fees and charges subject to such guidelines
and limitations as the Congress may provide,
consistent with the basic policy of local autonomy.
Such taxes, fees, and charges shall accrue
exclusively to the local governments.