Taxat

io n
Background
Department of Finance,
Republic of the Philippines
Taxes are compulsory contributions of all citizens to
raise revenue for nation-building.
Example:
• Individual Taxpayers
• Sole Proprietors
• Professionals
The revenue raised is used to propel government
workers and to build infrastructures for the
efficient and effective deliver of services by the
government.
Example:
• Public hospitals
• Public schools
• Highways and Bridges
What is the primary source of
policy on taxation?
PHILIPPINE CONSTITUTION
- The supreme law of the Republic of the Philippines
Article VI, Section 28 of the 1987
Constitution
" the rule of taxation shall be uniform and equitable "

" congress shall evolve a progressive system of

taxation "
Special laws that governs the
collection of taxes:
• Republic Act No. 8424 or the Tax Reform Act of 1997
(National Internal Revenue)
• Republic Act No. 7160 or the Local Government Code
of 1991
• Republic Act No. 10963 or the Tax Reform for
Acceleration and Inclusion act of 2017
 Taxation
is an inherent power by which the sovereign state
imposes financial burden upon persons and
properties as a means of raising revenue in order
to defray necessary state expenses.
 3000 BC -2800 BC
First known system of taxation in ancient Egypt.
Introdu c tio n
ofTax atio n
Spanish Colonial

GALLEON TRADING
Philippines - Mexico
Manila Galleon
Spanish Colonial

BANDALA SYSTEM
• Direct taxes
• Products are sold at a
low prices
Spanish Colonial

POLO Y SERVICIO
• Force Labor
Spanish Colonial
ENCOMIENDA SYSTEM
• Ipinagkakatiwala sa mga conquistador
ang isang teritoryo bilang pabuya
• Encomiendero - tawag sa ginagawaran
ng encomienda
• Cabeza de barangay - tagapangolekta ng
buwis
• 3 Generation
American Colonial

CEDULA
• payment of residence tax
• Identification
• proof of tax payment
Train Law
TRAIN Law
TAX REFORM FOR ACCELERATION AND INCLUSION

• is the initial package of the Comprehensive Tax

Reform Program or CTRP signed into law by President
Rodrigo Duterte on December 19, 2017
TAX REFORM FOR ACCELERATION AND INCLUSION
To maintain fiscal discipline and adhering to the
true principles of taxation, which should be:

Fairness Efficiency
Simplicity
TAX REFORM FOR ACCELERATION AND INCLUSION
Aims to fund the following:
 Education Healthcare
services Infrastructures
• 100% enrollment and • upgrade local hospitals
• The main concern of
completion rates • Achieve 100%
funds generated from
• build more philhealth coverage at
higher quality of TRAIN Law
classrooms • build, build, build
services
• hire more teachers program
• hire more medical
between 2017-2020
workers
Build, Build, Build Program
• focuses on building highways,
expressways, and flood control
projects. These projects are seen to
sustain high and inclusive growth and
will evidently benefit the poor the most

70% of funds
• the remaining 30% will go to social
services as TRAIN also desire to promote
healthy well-being of Filipinos.
The major feature of TRAIN
to reduce income taxes
• that gives higher take home pay for
99% of Filipino workers .
Annual Earners

• P250,000 or less/year.
High income owners have bigger
contribution to tax revenues.

P250,000 to P400,000
20% tax rate will be deducted
High income owners have bigger
contribution to tax revenues.

P400,000 to P800,000
P30,000 plus 25% tax rate will be
deducted
High income owners have bigger
contribution to tax revenues.

P800,000 to P2 million
P130,000 plus 30% tax rate will be
deducted
High income owners have bigger
contribution to tax revenues.

P2 million to 5 million
P490,000 plus 32% tax rate will be
deducted
High income owners have bigger
contribution to tax revenues.

More than 5 million a year

P1, 450,000 plus 35% tax rate will be
deducted
Bracket Creep
• according to former DBM Secretary Benjamin
Diokno the personal income tax rates were last
adjusted in 1997. These rates do not reflect anymore
the prevailing economic conditions. Inflation has
pushed income earners to higher income tax
brackets, even though their purchasing power has
not increased accordingly.
The TRAIN Law
provides for an
increase in taxes for
Sweetened beverages cigarettes

that will support on the

promotion of healthy lifestyle
Estate Tax
• for the estate tax rate, under the TRAIN law, it is
now subject to a flat rate of 6% regardless of the
value of the net estate. Previously, tax was
computed based on a tax schedule where an estate
worth P200, 000 and over was taxed from 5% to
20%
Value-Added Tax (VAT)
• an indirect tax and may be shifted or passed on to
the buyer, transferee or lessee. Previously, many
people used the exemptions in order to avoid tax
dues. Now, basic services like raw products,
education, and health are allowed exemptions
Oil Excise Tax
• since 1997, oil taxes have not radically change. Oil
excise tax will increase up to P6 scheduled within
three years and indexing will take place every year
after the three years of implementation. Taxes that
are being collected are used now to address
environmental issues and health problems
Automobile Excise Tax
• the tax rates are graded according to their brand
and model. High end cars got higher tax rates and
higher SRPs. All taxes that the government is
collecting are being used to subsidize priority
programs of the government like education,
health, and social protection.
Sugar-sweetened Beverages
• SSBs are not a substitute for healthy foods such as
rice and fruits. SSBs are relatively affordable
especially to children and the poor who are the
most vulnerable to its negative effects on health.
SSB products are easily accessible and can be found
in almost any store
the TRAIN Law adheres to the basic principles of
taxation like equity, neutrality , proportional and
progressive. Now, it seems that all individuals are
equally shared and burdened under the same
economic circumstances. Those who are best able to
pay are placed great burden than the poor.
Kinds of Taxes
 • tax on all yearly profits arising
Income from property, possessions,
trades, or offices.
Tax • tax on a person's income,
emoluments and profits.
Estate • tax on the right of the deceased
person to transmit property at
Tax death.
 • tax imposed and collected on
every sale, barter, exchange or
transaction deemed sale of
Value-added taxable goods, properties, lease of
Tax goods, services, or properties in
the course of trade as they pass
along the production and
distribution chain
 • tax imposed on the gains
presumed to have been realized by
Capital Gains the seller for the sale, exchange
or other disposition of real
Tax
property located in the
Philippines classified as capital
assets.
Excise • tax applicable to specified good
manufactured in the Philippines
Tax for domestic sale or consumption.
 • tax on documents, instruments,
loan agreements and papers,
Documentary agreements evidencing the
Tax acceptance, assignments, sale or
transfer of an obligation, rights
or property incident thereto.