TAXATION

CUERDO, CHARLES TRISTAN

AYUBAN, RALF
MURILLO,MONT
 WHAT IS TAX?

• TAXATION is defined in many ways. Commonly heard definitions include:It is the process
by which the sovereign, through its law making body, races revenues use to defray expenses
of government.It is a means of government in increasing its revenue under the authority of the
law , purposely used to promote welfare and protection of its citizenry.It is the collection of
the share of individual and organizational income by a government under the authority of the
law.
 PURPOSES AND SIGNIFICANCE OF
TAXES
• Primary Purpose - To generate funds or revenues used to defray expenses incurred by the
government in promoting the general welfare of its citizenry.Other Purpose - To equitably
contribute to the wealth of the nation.
 TRIBUTES FOR DATU
• Pre – Colonial Period(900 – 1521)  Government were called “Barangays”  No national
government

• Pre – Colonial Period(900 – 1521)  The chieftain’s family members were enjoying
exemption from paying taxes.  Non-payment of taxes was already punishable during this
period.

• Pre – Colonial Period(900 – 1521)  Three classes. ◦ ”tumao” class (includes datu) were the
nobility of pure royal descent. ◦ ”timawa” class,  warrior class or the “the third rank of
nobility" and "free men, neither chiefs nor slaves". required to render military service to the
datu in hunts, land wars or sea raids.
 IMPLEMANTATION OF TRIBUTOS &
SYSTEM OF TAXATION OF THE
SPANIARDS
• Taxes imposed by the Spanish Government in the Philippines Taxes during the Spanish
period was compulsory. All the Spanish Colonies in America and the Philippines were
required to pay taxes for two reasons.

• 1. as recognition of Spain's Sovereignty over the Colonies.

• 2. To defray the expenses of pacification (The act of forcibly suppressing hostility within the
colonies) and governance, thereafter.
 IMPLEMANTATION OF TRIBUTOS & SYSTEM
OF TAXATION OF THE SPANIARDS
TRIBUTO SANCTORUM CAJA DE COMUNIDAD POLO Y SERVICIO
Other forms of taxes from Sanctorum was a tax in the Caja de comunidad was a tax Polo y Servicio is the forced
the Spanish Era is the tributo, amount of 3 reales. These collected in the amount of 1 real for labor for 40 days, of men
which was originally were required for the cost the incurred expenses of the town
of Christianization, ranging from 16 to 60 years of
between 8 to 10 reales. in the construction of roads, repair
Forced labor, or polo y including the construction of bridges, or the improvement of age who were obligated to give
servicio, was also a network of the churches and the public buildings personal services to
for tax payment. Eventually, purchase of materials for community projects
with the cedula, Spain religious celebrations.
replaced tributo with cedula,
which allowed them to keep
track of the people who
could pay taxes.
 IMPLEMANTATION OF TRIBUTOS & SYSTEM
OF TAXATION OF THE SPANIARDS

TAX REFORM OF 1884 SIMMONS TARRIF URBANA TAX

Abolition of the hated Tribute and its
replacement of Cedula Tax and;
2. Reduction of the 40-day annual
forced labor (polo) to 15 days.
Legislation that reduced tariffs on more
imports than had any tariff act since the Civil
War and that included a rider establishing the
first income tax since passage of the
Sixteenth Amendment had allowed for such a
tax.
 a tax on the annual rental value of urban
real estate, known as. the 'urbana', and. 2) a
tax on salaries, dividends and profits,
commonly abbreviated as 'industria' (Plehn,
1901/1902). The urbana tax was levied at the
rate of 5% upon the net value of rental value
of all houses.
 TAXATION UNDER THE
AMERICANS
• Americans aimed to make the economy self-sufficient by running the government with the
possible sum revenue and create surplus in the budget.

• From 1898 to 1903, the Americans followed the Spanish system of taxation with some
modifications.

• Later on, the Urbana would be replaced by tax on real state, which became known as land
tax.

• The problem with the tax was that land titling in the rural area was very disorderly.
 TAXATION UNDER THE
AMERICANS
• 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.

• July 2, 1904: Bureau of Internal Revenue (BIR) was created through the passage 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
 REVENUE LAW OF 1904
• passed as reaction to the problems regarding collection of land tax. It prescribed ten major sources of
revenue:

• (1) license taxes on firms dealing with alcoholic beverages and tobacco
• (2) excise tax on alcoholic beverages and tobacco products
• (3) taxes on banks and bankers
• (4) document stamp taxes
• (5) the cedula
• (6) taxes on insurance and insurance companies
• (7) taxes on forest products
• (8) mining concessions
• (9) taxes on business and manufacturing
• (10) occupational licenses. In 1907 some provinces were authorized to double the fee for the cedula to
support the construction and maintenance of roads.
 TAXATION DURING
COMMONWEALTH PERIOD
• New measures and legislationIncome tax rates were increased in 1936-Surtax rate on
individual net income in excess of 10,000 pesos-Income tax rates of corporation were also
increased cedula tax was abolishedResidence tax was imposed on every citizen aged 18
years old and on-every corporation.
 In 1939, the Commonwealth government drafted
National Internal Revenue Code.

• 1. Normal tax of 3 percent and the surtax on income was-replaced by a single tax at a
progressive rate.
• 2. Personal exemptions were introduced.
• 3. Corporation income tax was slightly increased by introducing taxes on inherited estates or
gifts donated in the name of dead persons.
• 4. The cumulative sales tax was replaced by a single turnover-tax of 10% on luxuries.
• 5. Taxes on liquors, cigarettes, forestry products, and mining were increased.
• 6. Dividends were made taxable.
 WORLD WAR II

• Japanese military administration continued thesystem of tax collection• Foreign trade fell
FISCAL POLICY FROM
1946
TO PRESENT
• The United States advised the adoption of direct
taxation, but the administration of President
ManuelRoxasdeclinedtheproposalbecause it did not
want to alienate its allies in Congress.
 PRESIDENT ELPIDO QUIRINO•
• Implementation of import and exchange controls It reduced economic dependence on
imports
• New tax measures were passed
• Tax revenues increased twofold
• The succeeding presidencies of Magsaysay, Garcia, and
Macapagal promised to study the tax structure and policy-in
our country. (Through the creation of tax commission by
means of Rep Act No. 2211)• Congress did not pass any tax
legislation• Indirect taxation• Omnibus Tax Law• Rise in
corruption
 FERDINAND MARCOS

• Tax system was dependent in indirect taxes

• Taxes remained regressive and unresponsive
• Taxes grew in an average annual rate of 15%
• Taxes effort was at a low10.7%
 CORAZON AQUINO
• Corazon AquIno- introduction of VAT
• Restructuring of department finance and its agency
• Computerization Was introduced
• Corruption was relatively reduced
• both tax and revenue efforts arise.
 FIDEL RAMOS
FEATURES OF THE IMPROVED VAT

• Restored the VAT exemptions-for all cooperatives

• Expanded the coverage of the term "simple processes ”
• Expanded the overage of the original state.
 PRESIDENT GLORIA MACAPAGAL-
ARROYO
• Expanded Value AddedTax (E-VAT) was signed into law as Rep. Act 9337 subject to:VAT
energy products-such as coal and petroleum products and electricity generation,
transmissions, and distribution.
• Professional services were also taxed VAT tax rate was also increased from 10% to 12%.
• During the Administration of administration of President Arroyo, the EVAT law was enacted
the national debt to Gdp ratio peaked and underspending on public infrastructure and other
capital expenditures was observed.
• in 2008 - A RepublicAct No.9504 passed byArroyoExempted minimum wage earners from
paying income taxes
 PRESIDENT BENIGNO AQUINO III .

• Promised that no new taxes would be imposed- Adjustment of excise tax on liquor and
cigarettes or Sin tax Reform Increase of Department-of Health BudgetIncreased of free
health-insurance for the poor people enrolled in Philhealth.
• The Republic Act no.10351 or the sin tax reform law is one of the landmark legislation
under the Aquino Administration. It is primarily a health measure with revenue implications
. But more fundamentally , it is a governance measure.
• He signed the sin tax bill into law , ending a grueling battle to reform the Philippines excise
tax system.
 PRESIDENT RODRIGO
DUTERTE
-He Promised tax reform lower Tax rate’s shouldered
by working Filipinos.
-Limit VAT exemptions-and increase excise taxes on
petroleum products and automobiles
-Duterte signed into law-the Tax Reform
forAcceleration andInclusion (TRAIN)bill which is
expected to generate , 30 billion
THANKYOU FOR LISTENING.