Strategically managing tax involves financial analysis and decision-making while proactively controlling

your organisation's tax position so that legal requirements are met.

A strategy describes how the ends (goals) will be achieved by the means (resources). Strategy can be
intended or can emerge as a pattern of activity as the organization adapts to its environment or
competes. It involves activities such as strategic planning and strategic thinking.

Taxes are mandatory contributions levied on individuals or corporations by a government entity—

whether local, regional, or national. Tax revenues finance government activities, including public works
and services such as roads and schools, or programs such as Social Security and Medicare.

Effective tax rate refers to the percent of income that an individual or corporation owes/pays in taxes.
The effective tax rate for individuals is the average rate at which their earned income, such as wages,
and unearned income, such as stock dividends, are taxed.

TAX. : an amount of money that a government requires people to pay according to their income, the
value of their property, etc., and that is used to pay for the things done by the government.

3 Types of Taxes

Progressive tax—A tax that takes a larger percentage of income from high-income groups than from
low-income groups.

Proportional tax—A tax that takes the same percentage of income from all income groups.

Regressive tax—A tax that takes a larger percentage of income from low-income groups than from high-
income groups.

Income taxes are levies on wages and salaries earned by individuals, income from investments, and
other income.

All taxes can be divided into three basic types: taxes on what you buy, taxes on what you earn, and
taxes on what you own.

Sales taxes are paid by the consumer when buying most goods and services. These taxes provide state
and local revenue, funding services like education, transportation, and health care.

Income taxes are paid on many sources of income you might earn, like the taxes taken directly from
your paycheck. They are major sources of revenue for the federal government, many state
governments, and a few local governments.

Property taxes generate revenue at a local level. They provide funding for everything from parks, to
public safety services, to additional funding for schools.

Who will pay taxes in Philippines?

Income of residents in Philippines is taxed progressively up to 32%. Resident citizens are taxed on all
their net income derived from sources within and without the Philippines. For nonresident, whether an
individual or not of the Philippines, is taxable only on income derived from sources within the
Philippines.

Philippines Capital Gains Tax

Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the seller from a sale,
exchange, or other disposition of capital assets located in the Philippines, including pacto de retro sales
and other forms of conditional sale in the Philippines.

Philippines Documentary Stamp Tax

Documentary Stamp Tax is a tax on documents, instruments, loan agreements, and papers pertaining to
the acceptance, assignment, sale, or transfer of an obligation, rights, or property incident thereto in the
Philippines.

Philippines Donor’s Tax

Donor’s Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between
two or more persons who are living in the Philippines at the time of transfer.

Philippines Estate Tax

Estate Tax is a tax on the rights of a deceased person to transmit his/her estate to his/her lawful heirs
and beneficiaries at the time of death and on certain transfers which are made by law as equivalent to
testamentary disposition in the Philippines.

Philippines Income Tax

Income Tax is a tax on all annual profits arising from property, profession, trades or offices, or a tax on a
person’s income, emoluments, profits, and the like in the Philippines.

Philippines Percentage Tax

Percentage Tax is a 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 P550,000
and are not VAT-registered in the Philippines.

Philippines Value Added Tax (VAT)

Value Added Tax (VAT) is a business tax imposed and collected from the seller or vendor of services in
the course of trade or business on every importation, sale of properties (real or personal), or lease of
goods and other properties (real or personal). It is an indirect tax, thus, it can be passed on to the buyer
in the Philippines.

Philippines Withholding Tax on Compensation

Withholding Tax on Compensation is the final tax withheld from individuals receiving compensation
income in the Philippines. It is the employer’s responsibility to withhold and pay these taxes on a
monthly basis.

Philippines Expanded Withholding Tax

Expanded Withholding Tax is a kind of withholding tax which is prescribed only for certain payors and is
creditable against the income tax due of the payee for the taxable quarter year in the Philippines.

Philippines Final Withholding Tax

Final Withholding Tax is a 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. Income Tax withheld constitutes
the full and final payment of the Income Tax due from the payee on the said income in the Philippines.

Philippines Withholding Tax on Government Money Payments

Withholding Tax on Government Money Payments is the withholding tax withheld by government
offices and instrumentalities, including government-owned or -controlled corporations and local
government units, before making any payments to private individuals, corporations, partnerships,
and/or associations in the Philippines.

National taxes refer to mandatory contributions under the National Internal Revenue Code of 1997. On
the other hand, local taxes are imposed by the local government of an area under the Local Government
Code of 1991.