TAXATION
Juan Posadas, Jr., and Alfredo Yatao
 Inherent power of the state to impose
monetary burden to its citizens.
 Inherent power – a power of the state that
doesn’t need to be explicitly put in the
constitution; Eminent Domain, Police
Power, and Taxation
 Purposes
o Fiscal – revenue generation
o Regulatory – controls the flow of
resources to protect local
industries, reduce inequality, and
prevent inflation/ depression
 Kinds of Taxes imposed in the Philippines:
o Capital Gains- profit from sale of
non-inventory assets like stocks,
bonds, properties, and others
o Documentary Stamp- for documents
evidencing acceptance, sale, or
transfer of obligation, rights, or
property
o Donor’s Tax- for gratuitous transfer
of property
o Estate Tax- transmission/transfer of
estate to heirs/beneficiaries
o Income Tax- progressive form
(proportional to annual income)
o Percentage Tax- business tac for
sales/lease of goods, properties,
services that are not VAT-registered
o Value-Added Tax- business tax for
sale/lease of properties; can be
passed to the buyer
o Withholding Tax- inoperative tax
from individuals receiving pure
compensation
o Excise Tax- for the production,
sale, or consumption of a commodity
HISTORY OF TAXATION
 Pre-Colonial Era
o Taxes were in the form of crops or
goods (buwis,handug) to the
chieftains in exchange for security
and protection
 Spanish Era
o Contador de Resultas- Chief Royal
Accountant
o Taxes imposed: head tax, property
tax, indirect tax
o Tributo- 8-10 reales (later replaced
with cedula)
o Polo y servicio- network for tax
payment
o Sanctorum- tax paid to the local
church
o Vinta- for protection against Muslim
Pirates (Western Luzon)
 American Era
o Bureau of Internal Revenue- created
through Reorganization Act No.1189;
made operational by Henry Ide
(Internal Revenue Law of 1904)
o Collectors- present day;
Commissioners; first three Filipino
Collectors were Wenceslao Trinidad,
 Japanese Era
o BIR was combined with Bureau of
Customs
 Post-War Era
o BIR was re-established
o Withholding Tax- adopted through RA
690 (25% of total income tax)
o Establishment of regional/provincial
offices
o Creation of the Tax Census Division
to consolidate SALNs
o Rewards Law (RA 233)- informers of
tac evaders will be rewarded with
25%of the total revenue collected
o Inclusion of the Tobacco Inspection
Board and Accountable Forms
Committee
Marcos Administration
 Blue Master Program- curb abuses of
taxpayers and personnel
 Voluntary Tac Compliance Program-
encourage professionals to report their
true income and pay correct amount of
taxes
 Tax Account Number- identification and
verification of tax record
 Tax amnesty decrees were promulgated to
taxpayers to start anew
 National Internal Revenue Code of 1977-
updated 1934 Tax Code
 Creation of more offices and units
Aquino Administration
 Operation Walang Lagay
 Value-Added Tax- 1986 Tax Reform Program;
simplify tax administration and make the
tax system more equitable
 Tax Identifications System
 New Payment Control System
 Simplified Income Tax Scheme
Ramos Administration
 Action-Centered Transformation Program-
realignment
 Tax Computerization Project
Estrada Administration
 Economic Recovery Assistance Payment
(ERAP) Program- immunity from audit and
investigation to taxpayers who paid in
excess
 Humingi ng Resibo, Manalo ng Libo-libo-
raffle program to encourage and educate
taxpayers to demand invoices and receipts
 Large Taxpayers Monitoring System- monitor
tax compliance of large taxpayers
 Excise Taxpayers Service
 Integrated Tax System
Arroyo Administration
  4Rs: Reform, Reengineer, Restructure,
Redesign
 Voluntary Assessment and Abatement
Program- enhance revenue- generation and
for taxpayers with under-declared
sales/receipts/income
 Electronic Filing and Payment System
 Run After Tax Evaders
 Inclusion of new payment gateways
 Information-sharing between LGUs and BIR

P-noy Aquino Administration

 Tax evasion cases

Duterte Administration
 Tax Reform of Acceleration and Inclusion
(TRAIN) Law RA 10963- exemption of
taxpayers with an annual income of less
than or equal to P250,000.00; to
compensate, prices of some goods petroleum
products will increase

ISSUES ON TAXATION (Laforteza& Lapitan, 2020)

- Tax collection
- Tax exemptions (loans, importations,
donations)
- Monetary outflow
- Pending tax reforms