Characteristics or nature of the State’s power to tax

  1. It is inherent in sovereignty, hence, it may be exercised although not expressly granted by the Constitution.
  2. It is legislative in character, hence, only the legislature can impose taxes (high prerogative of sovereignty).
  3. It is subject to constitutional and inherent limitations, hence, it is not an absolute power that can be exercised by the legislature anyway it pleases.

Scope of the power of taxation: CPUS

The power of taxation is comprehensive, plenary, unlimited and supreme. This power is, however, subject to inherent and constitutional limitations.

Matters within the competence of the legislature to determine:

  1. The subject matter or object to be taxed.
  2. The purpose of the tax so long as it is a public purpose.
  3. The amount or rate of the tax.
  4. The manner, means and agencies of collection of the tax.
  5. The exemptions from the imposition.

Processes included or embodied in the term taxation:

  1. Levying or imposition of tax which is a legislative act.
  2. Collection of the tax levied which is essentially administrative in character.

Questions to Answer;

  1. Which of the following is not a basic principle of a sound taxation system?

A. It should be capable of being effectively enforced.

B. It must be a progressive tax.

C. It must be sufficient to meet government expenditures and other public needs.

D. It should be exercised to promote public welfare.

2 .  Which one of the following is not a characteristic of the State’s power to tax?

A. It is inherent in sovereignty

B. It is based on the ability to pay

C. It is legislative in character

D. It is subject to constitutional and inherent limitations

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About Jonathan Ruiz CPA

Entrepreneur, CPA Mentor, Stock market Newbie Mentor, Influential Author and Master's Degree in International Business graduate in Hult International Business School, UK. A father of two lovely daughters.
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