Philippine Taxation under American Period (1898-1935)

1898-1903: Americans followed the Spanish system of taxation.

The urbana which is a tax on the annual rental value of an urban real estate was replaced known as land
tax that charge both urban and rural real estate

Civil Government in the Philippines:

- William H. Taft (1902)

- Luke E. Wright (1904)

July 2, 1904: Bureau of Internal Revenue (BIR) was created through he passages of Reorganization Act
No. 1189

August 1, 1904: the BIR was formally organized and made operational.

The bureau is mandated by law to assess and collect all national internal revenue taxes, fees, and
charges

1904: The Internal Revenue Law of 1904

-licensed and excise taxes, taxes on banks, doc. Stamp taxes, cedula, taxes on insurance company, forest
products, mining concessions, taxes on business, occupational licenses

1907: Changes in cedula and industrial tax

The cedula under the new law went through changes as the rate was fixed per adult male. Some places
were authorized to double the fee for the cedula. The industrial tax was charged

October 3, 1913: Underwood-Simmons Tariff Act U.S Pres. Woodrow Wilson

Governor-General Francis Burton Harrison

Its purpose was to reduce levies on manufactured and semi-manufactured goods and to eliminate duties
on most raw materials.

New sources of tax were introduced:

Income tax (1914)

Inheritance Tax (1919)

National Lottery (1932)

Taxation during the Commonwealth Period (1935-1945)

1936: Addition of a surtax rate 

Nov. 15, 1937: Abolition of Cedula Tax 

The cedula tax was abolished by the National Assembly of the Philippines because of the heavy burden
that brings to the poor people.

January 1, 1940: Imposing of Residence Tax 

Every inhabitant of the Philippines over eighteen years of age who has been regularly employed on a
wage or salary basis and on every corporation no matter how created or organized is subject to
residence tax. Exemptions are the following:

-US high commissioner and member of his staff,

-Commissioned officers and enlisted soldiers of US army and navy

-Representative and officers of foreign powers

-Transient visitors staying less than 3 months in Philippines

National Internal Revenue Code of 1939

-New tax system during commonwealth

Abolition of Cedula Tax

It will be known throughout the Philippines today that we have abolished a certain legislation which
has been the cause of bitter sufferings and hardships among the common people, much more to our
mothers. Today we abolish the cedula tax. The younger generation who has been reared in an
atmosphere of ease and comfort

Will not understand the real reason for the abolition of the cedula who suffered during the Spanish
regime and still leaving now, still remember that out chief complaint arose from the payment of the
cedula tax. One of the promises of our leaders of the Revolution was to abolish the cedula should
they win. We triumphed against the Spaniards, but the cedula was not abolished; it was only
decreased slightly. It should have been abolished long ago, but the plan was not carried out for
want of a remedial substitute. Now we know where to get that substitute, and what the people will
get today is the relief they will get from the abolition of the cedula.

I am not going to tell you where we are going to get the money as substitute for the money realized
from the cedula tax, but we are abolishing this because this is a tax that is a burden to the poor.  It is
not just that the unemployed, that the individuals to whom the Government has not given any job
be taxed. If they have no source of income and no
work from which to get an income, they must not be compelled in justice to them to bear a burden
like the cedula tax. This is not justice, and from the bottom of my heart I am
happy to tell you that, by virtue of a legislative enactment, the National Assembly has abolished the
cedula tax.

From now on, no tax shall be collected that will not be based on the ability of the tax- paying public
to pay. Until now the poor are heavily taxed in our country. The rich may say that they are paying
more taxes, because they are paying thousands of pesos in taxes sometimes, but I am prepared to
agree with anybody who is paying this much that if he gave me the wealth from which he derives
his income to pay his taxes to the government, I would pay taxes twice as much. What the rich pay
for taxes are only taken from their surplus, but the poor get their money to pay their taxes from
their means of subsistence and the subsistence of their families. I do not mean to say that the poor
should not pay any taxes. The sacred duty of the citizens is to support their government.