LESSON 15: TAXATION
testamentary disposition; based on a
TAXATION – laying a tax through which the
government generates income to defray its
expenses.
-It is a way to raise funds for government
programs and services that benefit Filipino
citizens.
THE IMPOSITION OF TAXES IS DONE BY
LAW THROUGH THE BUREAU OF
INTERNAL REVENUE
TYPES OF TAXES
There are 2 types of taxes: National and Local
Taxes
NATIONAL TAXES – ones paid to the
government through the Bureau of Internal
Revenue.
-Based on the National Internal Revenue Code
of 1997 or the Republic Act No. 8424 otherwise
known as the Tax Reform Act of 1997.
TYPES OF NATIONAL TAXES:
1. Capital Gains Tax – tax imposed on
gains that may have been realized by a
seller from the sale, exchange, or other
disposition of capital assets.
2. Documentary Stamp Tax – tax on
documents, instruments, loan
agreements and papers evidencing the
acceptance, assignment, sale, or transfer
of an obligation, rights, or property
incident thereto.
3. Donor’s tax – tax on a donation or gift;
based on a graduated schedule of tax
rate.
4. Estate Tax – tax on the right of the
deceased person to transmit his/her
estate to lawful heirs and beneficiaries at
the time of death and on certain transfers
which made by law as equivalent to
graduated schedule of tax rate.
5. Income Tax – a tax on all annual profits
made from property ownership,
profession, trades or offices; Individual
income tax is based on graduated
schedule of tax rate
6. Percentage Tax – business tax imposed
on persons or entities who sell or lease
goods, properties, or services in the
course of trade or business whose gross
annual sales or receipts do not exceed
the amount required to register as VAT-
registered taxpayers; usually based on a
fixed rate
7. Value-Added Tax – business tax
imposed and collected from the seller in
the course of trade or business on every
sale of properties (real or personal), or
vendors of services; latest law on
Taxation is RA 9337 signed on May
24,2005 by President Gloria Arroyo is
known as the “expanded value-added
tax” or the “E-VAT” law.
8. Excise Tax – tax imposed on goods
manufactured or produced in the
Philippines for domestic sale or
consumption or any other disposition.
9. Withholding Tax on Compensation –
tax withheld from individuals receiving
purely compensation income arising
from an employer-employee relationship
10. Expanded Withholding Tax –
prescribed only for certain payors like
those withheld on rental income and
professional income.
11. Final Withholding Tax – kind of
withholding tax which is prescribed only
for certain payors and is not creditable
against the income tax due of the payee
for the taxable year.
12. Withholding Tax on Government
Money Payments – is the withholding
tax withheld by government offices.
13. Local Taxes – Based on local 9. Fees Sealing and Licensing of Weights
government taxation in the Philippines and Measures – this is to imposed
as stated in Republic Act 7160 or the regulations with regards to such weights
local government code of 1991. and measures as prescribed by the city,
provincial or municipal council.
TYPES OF LOCAL TAXES: 10. Fishery Rentals, Fees, and Charges –
imposed by the municipality/city to
1. Tax on Transfer of Real Property
grantees of fishery privileges in the
Ownership - is imposed on the sale,
municipal/city.
donation, barter, or on any other mode 11. Community Tax – tax levied by cities
of transferring ownership of real or municipalities to every Filipino or
property. alien living in the Philippines.
2. Tax on Business of Printing and 12. Taxes Levied by the Barangays on
Publication – is imposed on printing Stores or Retailers with Fixed
and publication businesses. Business Establishments – with gross
3. Franchise Tax – is a tax on franchise
sales of receipts of the preceding
businesses.
calendar year.
4. Tax on Sand, Gravel, and other
13. Service Fees or Charges – are fees or
Quarry Resources – is imposed on
charges collected by the barangays for
ordinary stones, sand, gravel, earth, and
services rendered in connection with the
quarry resources, as defined under the
regulation or the use of barangay-owned
national internal revenue code, as a
properties or service facilities.
mended.
14. Barangay Clearance – fee collected by
5. Professional Tax – is an annual tax on
barangays upon issuance of barangay
each person engaged in the exercise or
clearance, a document required for many
practice of his or her profession.
6. Amusement Tax – is a tax collected government transactions.
from the proprietors, lessees, or
operators of theaters. Cinemas, concert
halls, circuses, boxing stadia, and other
places of amusement.
7. Annual Fixed Tax for Every Delivery
Truck or Van of Manufacturer or
Producers, Wholesalers of, Dealers, or
Retailers in, Certain Products – is an
annual fixed tax for every truck, van or
any vehicle used by manufacturers,
producers, wholesalers, dealers, or
retailers in the delivery or distribution or
distilled spirits, fermented liquors, soft
drinks, and cigarettes, and other
products to sell outlets, or consumer,
whether directly or indirectly, within the
province.
8. Tax on Business – imposed by cities or
municipalities on businesses.