VII. Taxation Law

Constitutional Mandates and Principles in Taxation Law

Under the 1987 Constitution, the rule of taxation must be uniform and equitable, and Congress is directed to evolve a progressive system of taxation¹. Congress may, by law, authorize the President to fix tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within specified limits and restrictions¹. Additionally, charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and improvements actually, directly, and exclusively used for religious, charitable, or educational purposes are exempt from taxation¹. To pass any law granting a tax exemption, the concurrence of a majority of all the Members of Congress is strictly required¹.

In Tayam v. Recto, G.R. No. 280898, 22 April 2026, the Supreme Court explained that under the destination principle governing the value-added tax (VAT) as a tax on consumption, goods and services are taxed solely in the country where they are consumed². As such, goods consumed outside the Philippines are not taxed locally, and statutory provisions granting VAT refunds conform to this governing principle². Furthermore, when constitutional questions concerning tax measures involve transcendental importance, overarching significance to society, or paramount public interest that directly impacts the taxing power and public coffers, procedural limitations on locus standi may be relaxed².

In connection with tax practice and compliance, the practice of public accountancy expressly covers the preparation of income tax returns when related to accounting procedures, as well as representing clients before government agencies on tax and related accounting matters³.