The provision of Article 19 of the Constitution that the people shall have the duty to pay tax in accordance with law is intended to point out that the people have the duty to pay tax pursuant to the prescriptions in respect of taxpaying bodies, tax denominations, tax rates, methods of tax payment, and time of tax payment as set forth by law. Whether there are any facts to support the cause of taxation and the degree of proof of the relevant evidence are questions of fact beyond the sphere of the principle of taxation by law. The Ministry of Finance Directive (72) Tai-Tsai-Shui-Tze No. 31229 (February 24, 1983) issued to its subordinate financial and tax agencies instructs to the effect that income from interest earned by a creditor on his right secured by a mortgage with an agreed interest expressly stipulated may be assessed and taxed according to the information recorded at the land administration office on the creation and cancellation of the mortgage and that if the party alleges that he has received no interest, he must assume the burden of proof to support his allegation. Inasmuch as this directive constitutes merely an instruction to tax collection offices with respect to their method of identifying the fact to support the cause of taxation rather than prohibiting the party concerned from producing rebuttal evidence, and is not binding upon the court, which, when hearing a case, has in any event the duty to consider the contents of all arguments and the results of investigation of evidence and to judge whether the fact is true, it can not be said to be an encroachment upon the right of the people or in conflict with Articles 15 and 19 of the Constitution.

       The provision of Article 19 of the Constitution that the people shall have the duty to pay tax in accordance with law is meant to proclaim the "principle of taxation by law." It is basically intended to point out that the people have the duty to pay tax pursuant to the prescriptions in respect of taxpaying bodies, tax denominations, tax rates, methods of tax payment, and time of tax payment as set forth by law. While it is true that no tax may be levied against the above principle, whether there are any facts to support the cause of taxation and the degree of proof of the relevant evidence are questions of fact beyond the sphere of the principle of taxation by law. 

       The Ministry of Finance Directive (72) Tai-Tsai-Shui-Tze No. 31229 (February 24, 1983) issued to its subordinate financial and tax agencies states: "The recordation of a mortgage has an absolute effect under Article 758 of the Civil Code and Article 43 of the Land Act. Where a creditor who loans money to a debtor against the furnishing of real property as a security perfects the recordation of a mortgage with a land administration office, with the agreed interest expressly stipulated therein, the tax collection office may, based on the information recorded at the land office, assess the creditor*s income from such interest accruable in the year before deletion of the recordation of the mortgage and levy tax thereon as a Category 4 income under Article 14, Paragraph 1, of the Income Tax Act. This is because a loan arrangement between individuals is not comparable with that between companies or firms in that the unavailability of account books to show the receipt or payment of interest thereon makes it impossible to assess such income by the rule of income and disbursement realization, and thus it is only natural that the income from such interest is deemed to have been periodically received as it is stipulated in the documents recorded. If the party alleges that he has received no interest, he must bear the burden of proof to support his allegation, and the evidence produced must be concrete and acceptable under the ordinary rule of thumb (erfahrungsmäβig). A documentary proof executed by an individual as the debtor will be inadmissible." Inasmuch as this directive, albeit not totally satisfactory and appropriate, constitutes merely an instruction to tax collection offices with respect to the method of identifying the fact to support the cause of taxation rather than prohibiting the party concerned from producing rebuttal evidence, and is not binding upon the court, which, when hearing a case, has in any event the duty to consider the contents of all arguments and the results of investigation of evidence and to judge whether the fact is true, it can not be said to be an encroachment upon the right of the people or in conflict with Articles 15 and 19 of the Constitution.  

*Translated by Raymond T. Chu.