Nature, Sources and Interpretation of Tax Laws

TAX LAW- any law which provides for the assessment and collection of taxes for the support of the government and other public purpose.

Nature of Tax Laws-
1. Not political in nature
2. Civil and not penal

Sources of Tax Laws
1. Constitution
2. Legislation, including Presidential decrees and executive orders on taxation and tax ordinances;
3. Administrative regulations and rulings or opinions of tax officials including opinions of the Secretary of Justice, the Commissioner of the BIR, and the secretary of Finance;
4. Judicial decisions as those rendered by the supreme court and the court of tax appeals
5. Treaties
6. Legislative materials

Interpretation and Construction of tax laws.

Tax statutes must be given a reasonable interpretation considering the purpose and intent of the legislature; however they should not be construed as to make tax evasion possible. In case of doubt tax laws must be construed liberally in favor of the taxpayer and against the government.

Tax exemptions statutes on the other hand, being a surrender of the state’s power to impose taxes, are to be construed strictly against the person, entity, or property claiming the exemption and in favor of the government.