Final coverage's

Lesson 4:
Social, Political, Economic, and
Cultural Issues in Philippine
History
 TAXATION
•The processor means by which the sovereign, through its law making
body, raises income to defray the necessary expenses of the
government.
•An enforced proportional contribution levied by the law making
body of the state to raise revenue to support the indispensable and
all the necessary expenses of the government.
•Primary purpose: To generate funds to defray expenses incurred by
the government in promoting the general welfare of its citizenry.
•Other purposes: To equitably contribute to the wealth of the nation,
to protect new industries, and to protect local producers
 Evolution of Philippine Taxation
• The tax rate is equal for all citizens is a
characteristic of a progressive tax system in
the Philippines.
• The rate of tax increases as the income tax
base or income bracket increases is true of a
progressive system of taxation
• Tariff –is the term refers to duties payable on
goods, whether imported or exported
• One of the major functions of taxes is to finance
real government expenditures. This function
can simply be states as to raise revenues
• Through an income tax the government tax
people’s labor
• Tax exemption is an unlawful act escaping from
payment of taxes.
• Estate tax, is a tax on the right of the deceased
person to transmit his/her estate to his/her
lawful heirs and beneficiaries at the time of
death.
• Toll- the sum of money collected for our use of
a road, bridge and high-ways
• Raise revenue for the support of government
Is the primary purpose of taxation.
• Productivity- is the principle of taxation does
the Philippine government lack if it fails to raise
the needed revenue and therefore borrows
from other countries to cover its expenses?
 What Are The Different Tax Types?

• National taxes are the ones paid to the government through the Bureau of
Internal Revenue (BIR). Our national taxation system is based on the National
Internal Revenue Code of 1997 or the Republic Act No. 8424 also known as the
Tax Reform Act of 1997, as amended. Import and export tariffs levied by the
Bureau of Customs are also considered national taxes and duties but will not be
discussed in this article.
• Local taxes, on the other hand, are based on Republic Act 7160, otherwise known
as the Local Government Code of 1991, as amended. These taxes and fees are
imposed by the local government units in every province, city, municipality, and
barangay, which are given the power to levy such taxes by the code.
 National Taxes
• Capital Gains Tax is tax imposed on the proceeds from sale, exchange, or other disposition of capital assets located in the
Philippines. Examples of sold assets that are subject to capital gains tax include properties, stocks, pieces of jewelry, and other
high-value goods.
• Documentary Stamp Tax is imposed on documents, instruments, loan agreements, and papers that are used as evidence of
acceptance, assignment, sale or transfer of obligation, rights, or property. Documentary stamps are usually found on deeds of
sale and bank promissory notes, among others.
• Donor’s Tax is levied on a donation or gift for the gratuitous transfer of property between two or more persons who are both
still living at the time of transfer. Even relief goods sent for donation are charged this type of tax.
• Estate Tax is required to be paid before an estate is transferred to the rightful beneficiary or heir of a deceased person. This is
based on a graduated schedule of tax rate.
• Excise tax is tax on goods produced for sale and subsequently sold within the country. It is considered an indirect tax which
means the manufacturer is supposed to recover it by adding the amount to the selling price. Sin tax on tobacco and alcohol is
an example of excise tax.
• Income tax is imposed on all compensation and income received or earned from practice of profession, conduct of trade in
business, and from properties.
• Percentage tax is a business tax imposed on businesses not covered by Value Added Tax and where gross annual receipts for
sale of good and services do not exceed Php750,000.
• Value Added Tax or VAT or EVAT  is another kind of indirect tax that is passed on to the end consumer. It is a form of
consumption tax making it the most common tax type because all final sales are almost always charged this tax.
• Withholding tax on compensation is tax deducted from salaries of employees and it is the company’s responsibility to remit
the same to the government. Other kinds of withholding tax are Expanded Withholding Tax, Final Withholding Tax,
and Withholding Tax on Government Money Payments.
 Local Taxes
• Basic Real Property Tax is tax on real properties classed as follows: agricultural, commercial, industrial,
residential, timberland, and mineral.
• Franchise Tax is imposed by LGUs on business franchises at a rate not more than 50% of 1% of the gross
annual receipts of the previous taxable year.
• Business of Printing and Publication Tax is collected from any business that does printing or publication of
printed materials such as books, cards, pamphlets, posters, or tarpaulins.
• Professional Tax is collected from doctors, lawyers, engineers, and other professionals engaged in the
exercise or practice of professions that require government examination or acquisition of license to practice.
• Amusement Tax is tax on all forms of entertainment such as movies, concerts, and plays. This tax is usually
already included in the ticket price.
• Community Tax, more commonly called Cedula, is required from individuals from a base fee of Php5.00 and
additional Php1.00 for every Php1,000 income.
• Annual Fixed Tax for Delivery Trucks and Vans amounting to Php500 is collected by the LGU from trucks and
vans which deliver goods such as beer, soda, and/or cigarettes.
• Barangay Tax is subjected on sari-sari stores and retailers whose annual gross sales do not exceed Php50,000
and is accrued on the first day of January of each year.
• Barangay Clearance is paid as a legal permission for particular individuals, hosts, or companies to conduct an
event or start a business in a barangay.