Practice question
A statute exacts a compulsory amount from sellers and directs all proceeds to paying a named private company's ordinary debts and increasing its capital. The stipulated facts establish no genuine public program or public benefit beyond that company's financial rescue. Defenders say any compulsory exaction becomes valid merely because an agency collects it. What is the best answer?
- Agency collection conclusively establishes public purpose
- The actual purpose remains controlling; compulsory collection cannot validate a tax for a purely private purpose
- A private recipient always defeats public purpose even when aid is incidental to a genuine public program
- Only the levy’s name matters
- Taxes may never finance any economic program
Legal references
- CIR v. Algue, GR L-28896, February 17 1988, main decision: https://lawphil.net/judjuris/juri1988/feb1988/gr_l-28896_1988.html
- Planters Products v. Fertiphil, GR166006, March14 2008, main decision: https://lawphil.net/judjuris/juri2008/mar2008/gr_166006_2008.html
- 1987 Constitution, Article III Sections 1 and 20, Article VI Sections 24 and 28, Article X Section 5: https://lawphil.net/consti/cons1987.html
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