A tax that governments impose on financial income generated by all entities within their

jurisdiction. By law, businesses and individuals must file an income tax return every year
to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a
key source of funds that the government uses to fund its activities and serve the public.

The first income tax imposed in America was during the War of 1812. Its original
purpose was to fund the repayment of a $100 million debt that was incurred through
war-related expenses. After the war, the tax was repealed, but income tax became
permanent during the early 20th century.

History of taxation in the Philippines is not that old. Self assessment system for
individuals and corporations was introduced as early as 1934 when the first Philippine
Tax Code was enacted by the parliament. This code was immediately applied to income
tax, corporation income tax, and inheritance tax. Later on the area of application was
expanded and other national internal revenue taxes were encompassed.

The pre-colonial society, being communitarian, did not have taxes.

5. Tribute Encomienda System Bandala Polo Y Servicio (Forced Labor)
Manila-Acapulco Galleon TradeDuring the Spanish Period, new income
generating means were introduced by the government such as the :
6. It brought silver from Nueva Castilla and silk from China by way of Manila. It
was the main source of income for the colony during its early years. ManilaAcapulco Galleon Trade
7. One could be exempted from the polo by paying a fee called falla (which was
worth one and a half real). It was the forced labor for 40 days, of men ranging
from 16 to 60 years of age who were obligated to give personal services to
community projects.Polo Y Servicio
8. It comes from the Tagalog word mandala, which is a round stock of rice stalks
to be threshed. It is a form of direct taxes that the Spaniards implemented in
which the natives were coerced to sell their products to the government at very
low prices.Bandala System

9. Part of this tribute goes to the encomendero and the rest to the Church and
government. Here, a meritorious Spaniard (called an encomendero) is given
full authority to manage the encomienda by collecting tribute from the inhabitants
and govern people living on it. It is a land management system similar to the
feudal system in Europe.Encomienda System
10. But in 1884, the tribute was replaced by the cedula personal or personal
identity paper, equivalent to the present community tax certificate. It was the
residence tax during the Spanish times. It may be paid in cash or kind, partly, or
wholly.Tribute
11. Did you know?That in the 19th century, the cedulaserved as an
identification card thathad to be carried at all times. Aperson who could not
present his orher cedula to a guardia civil couldthen be detained for
beingindocumentado.Andres Bonifacio and other Katipunerostore their cedulas
in August 1896, signalingthe start of the Philippine Revolution.
12. The Development of the Community Tax The cdula was imposed by the
Americans on January 1, 1940, when Commonwealth Act No. 465 went into
effect, mandating the imposition of a base residence tax of fifty centavos and an
additional tax of one peso based on factors such as income and real estate
holdings. The payment of this tax would merit the issue of a residence certificate.
Corporations were also subject to the residence tax.
13. A sample cedula in the 1920s.
14. What is a cedula? Also known as a residence certificate, is a legal identity
document in the Philippines. Issued by cities and municipalities to all persons that
have reached the age of majority and upon payment of a community tax, it is
considered as a primary form of identification in the Philippines and is one of the
closest single documents the Philippines has to a national system of
identification, akin to a drivers license and a passport.
15. Why is cedula important?A person is required to present a cedula whenhe
or she acknowledges a document before anotary public; takes an oath of office
uponelection or appointment to a governmentposition; receives a license,
certificate orpermit from a public authority; pays a tax orfee; receives money from
a public fund;transacts official business; or receives salaryfrom a person or
corporation.
16. A sample cedula in the 2000s.
17. In Modern Industrial Nations The government designates a tax base (such
as income, property holdings, or a given commodity) A Tax Law is a body of

rules passed by the legislature by which the government acquires a claim on

taxpayers to convey, transfer and pay to the public authority