To p i c 7 :

History of

Taxation
in the Philippines
 The team

REYES PODIQUIT SALIENDRA SOLOMON

 Topics

1 2 3 4
What is Importance and Evolution of the Problem/s of
Taxation? Purpose of Taxation System in Taxation in our
Taxation in the the Philippines Country
Philippines
What is Taxation?
Taxation
Taxation is the term by which
the government of a country or
other authority collects money
in the form of taxes from its
citizens to pay for public
expenses.
Purpose
and its importance

1. Revenue Generation
2. Redistribution of Wealth
3. Fiscal Policy Tool
4. Behavioral Modification
5. Market Stabilization
Purpose and its Importance
Revenue Generation
The primary purpose of taxation is to raise funds for
government expenditure. Governments use tax revenues
to finance public goods and services such as
infrastructure, education, healthcare, defense, and social
welfare programs.
Purpose and its Importance
Redistribution of Wealth
Taxes can be used to redistribute wealth from wealthier
individuals or corporations to those with lower incomes
through progressive tax systems or social welfare
programs. This helps to reduce income inequality and
provide assistance to those in need.
Purpose and its Importance
Fiscal Policy Tool
Taxation is a crucial tool for governments to implement fiscal
policy. By adjusting tax rates and policies, governments can
influence aggregate demand, economic growth, and inflation. For
example, during periods of economic downturn, governments may
lower taxes to stimulate spending and investment, while during
times of high inflation, they may increase taxes to reduce demand
and control prices.
Purpose and its Importance
Behavioral Modification
Taxation can be used to influence behavior and promote socially
desirable outcomes. For instance, governments may impose taxes on
goods like cigarettes or alcohol to discourage consumption and
improve public health. Similarly, tax incentives can encourage
activities such as charitable donations, investment in renewable
energy, or research and development.
Purpose and its Importance
Market Stabilization
Taxes can help stabilize markets by reducing volatility and
addressing market failures. For example, taxes on
pollution or carbon emissions can internalize the external
costs of environmental damage, leading to more efficient
resource allocation and sustainable development.
Evolution of Taxation
System
 Evolution

Pre- Spanish American Commonwe New Tax

Colonial Era Era alth System
Era Era
Taxation in the Pre-
Colonial Era
Pre-Colonial Era
Since barter was the leading form of trade back
then, tax (called buwis or handug) came in
forms of crops or goods, which the people
living under the datu share a portion of their
harvest or property, in exchange for security
and protection.
Pre-Colonial Era
Only the timawa (free men) pay taxes since the
maharlikas (nobility) and the datu offer
protection, while the oripun (slaves) couldn’t
offer anything since they lived to serve the
highest and the lowest of the castes were
exempted from tax payment.
Taxation in the
Spanish Era
Spanish Era
During these times, taxes that were collected from the
inhabitants varied from tribute of head tax of one gold
maiz annually; tax on the value of jewelry and gold
trinkets: indirect taxes on tobacco, wine, cockpits, and
powder.
Spanish Era
The taxation during the Spanish era was compulsory. All 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, and

2. to defray the expenses of pacification (the act of forcibly
suppresing hostility within the colonies) and governance,
thereafter.
Spanish Era

Taxes during the Spanish period in the

Philippines were the tribute, sanctorum,
donativo, caja de communidad, and
servicio personal.
Spanish Era
Tributo
• Tributo was a general tax paid by the Filipinos to Spain which
amounted to 8 Reales. 

• Those who were required to pay the tribute were the (a) 18 to
50 years old males, (b) the carpenters, bricklayers, blacksmiths,
tailors, and shoemakers, and (c) town workers such as those in
road construction, and those whose in public in nature.
Spanish Era
Sanctorum 

• Sanctorum was a tax in the amount of 3 Reales. 

• These were required for the cost of Christianization, including

the construction of churches and the purchase of materials for
religious celebrations.
Spanish Era
Donativo

• Donativo was a tax in the amount of half Real for the military
campaign of the government against the Muslims. 

• In later years, however, the amount collected from donativo

was almost exclusively used for the Spanish fort in
Zamboanga.
Spanish Era
Caja de Comunidad

• A tax collected in the amount of 1 Real for the incurred

expenses of the town in the construction of roads, repair of
bridges, or the improvement of public buildings.
Spanish Era
Servicio personal (polo y servicios)
• A form of forced labor during the Spanish period in the
Philippines.
• All able-bodied males, 16 to 60 years old were required to work in
the construction of bridges, churches, and galleon ships. They were
called polista. A polista can be freed from forced labor was when
he paid falla or fine.
• Gobernadorcillo, cabeza de barangay, and other members of the
principalia were exempt from forced labor and falla.
Spanish Era
The Chinese in the Philippines were also made to pay their
discriminatory cedula which was bigger than what the Filipinos
paid.

Two direct tax were added in 1878.

Urbana - tax on the annual rental value of an urban real estate

Industria - tax on salaries, dividends and profit

 Spanish Era

Revolts Against the System

Spanish Era: Revolts - Cagayan and Dingras
It occurred on Luzon in the present-day provinces of Cagayan and
Ilocos Norte in 1589. Ilocanos, Ibanags and other Filipinos revolted
against alleged abuses by the tax collectors, including the
collection of high taxes. It began when six tax collectors who had
arrived from Vigan were killed by the natives. Governor-General
Santiago de Vera sent Spanish and Filipino colonial troops to
pacify the rebels. The rebels were eventually pardoned and the
Philippine tax system reformed.
Spanish Era: Revolts - Agustin Sumuroy
The government in Manila directed that all natives subject to the polo are not
to be sent to places distant from their hometowns to do their forced labor.
However, under orders of the various town alcaldes, or mayors, The Waray
were being sent to the shipyards of Cavite to do their polo y servicio, which
sparked the revolt. The local parish priest of Palapag was murdered and the
revolt eventually spread to Mindanao, Bicol and the rest of the Visayas,
especially in places such as Cebu, Masbate, Camiguin, Zamboanga, Albay,
Camarines and parts of northern Mindanao, such as Surigao. A rebel
government was successfully established in the mountains of Samar.
Spanish Era: Revolts - Francisco Maniago

Pampanga faced Spanish religious orders due to its wealth

and forced labor, leading to exploitation of rice. The
Kapampangans set fire to their campsite, causing a fight
that depleted the Spaniards. The Maniago revolt, led by
Andres Malong, was the start of a larger revolt in
Pangasinan, fueled by the call of Maniago.
Spanish Era: Revolts - Andres Malong
Andres Malong was the maestro de campo of Binalatongan, now San Carlos
City, Pangasinan in the 1660s. He assisted many Spaniards in governing
different towns in Pangasinan, and as such, had learned and was trained to use
force and cruelty. He hoped of being the King of the province, however, set
this plan aside when a war, led by Francisco Maniago, broke out in Pampanga.
Malong started his campaign in a small barangay called Malunguey, but failed.
Having the same condition as in Pampanga, he led the people in Pangasinan to
take up arms against the Spaniards. It spread like wild fire in Pangasinan.
Because of his success, he proclaimed himself King of Pangasinan.
Malong's Revolt
Taxation in the
American Era
American Era
Americans followed the taxation system of the Spaniards.
In 1902, the first civil government was established under
William H. Taft. However, it was only during the term of
second civil governor Luke E. Wright that the Bureau of
Internal Revenue (BIR) was created through the passage of
Reorganization Act. 1189, July 2, 1904.
American Era

William H. Taft Luke E. Wright

American Era

The military government suspend the contract for the sale

of opium , lottery and mint charges for coinage of money.
Urbana was replaced by tax on real estate, which become
known as land tax.
American Era

The problem with land tax was that land titling in the rural
areas was very disorderly; the appraising of land values
was influence by political and familial factor and the
introduction of taxation system on agricultural land faced
objections from the landed elite.
American Era
It prescribed ten major sources of revenue:
1. Licensed taxes on firm dealing in alcoholic beverages and Tabaco
2. Excise taxes on alcoholic beverages and Tabaco products.
3. Taxes on banks and bankers
4. Document stamp taxes
5. Cedula
6. Taxes on insurance and insurance companies
7. Taxes on forest products
8. Mining concession
9. Taxes on business and manufacturing
10. Occupational licenses
American Era
Cedula went through changes in new law as the rate was fixed per adult male
which resulted in a great decline in revenue.
• in 1907 some provinces were authorized to double the fee for the cedula to
support the construction and maintenance of roads.
• The industria was levied on the business community and become a highly
complex system that assigned a certain tax to an industrial or commercial
activity according to their profitability.
• In 1913, the Underwood-Simmons Tariff Act was passed, resulting in a
reduction in the revenue of the government as export taxes levied on sugar,
tabacco, hemp and copra were lifted.
American Era
• In 1904- internal revenue act such as the imposition of taxes
on mines, petroleum products, and dealer of petroleum
products and tabacco.
• New source of taxes were introduced later on. In 1914, an
income tax was introduced; in 1919, an inheritance tax was
created; and in 1932 a national lottery was established to
create more revenue for the government.