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INTRODUCTION

Macro-economic development and social equality initiatives embodied in the


Medium-Term Development Plan (2004 – 2010) have been supported by the National
Government’s funding sources such as government services, income from public
enterprises, foreign and domestic loans and disposition of private assets, but a
significant portion of these financial resources have been contributed by taxes, tariff
duties and fees and charges. While taxes usually serve as the premier revenue raiser
to finance government expenditures and operations, taxes have also been an important
instrument to sustain economic growth and wealth redistribution. In this regard, a
worthwhile tax information and taxpayer awareness program is said to promote a
better understanding of this attribute of the tax system.

To achieve the NTRC’s commitment in supporting government’s tax


information and taxpayer awareness program, this handbook is prepared to serve as a
guide to a general comprehension of the various Philippine taxes, fees, charges and
tariff and customs duties collected by the government both at the national and local
levels and other information such as fiscal incentives, tax administration and research
and statistical data on revenue collections.

Since this is only a synthesis of the basic guide to Philippine taxes, a more
detailed information of the taxes, tariff duties and fiscal incentives described in this
handbook can be obtained from the following sources: National Internal Revenue
Code of 1997 [Republic Act (RA) No. 8424, as amended]; Tariff and Customs Code
of 1978 [Presidential Decree (PD) No. 1464, as amended]; Local Government Code
of 1991 (RA 7160); Philippine Immigration Act of 1940 [Commonwealth Act (CA)
No. 613, as amended]; Travel Tax Law (PD 1183); Omnibus Investment Code of
1987 [Executive Order (EO) No. 226]; Export Development Act of 1994 (RA 7844);
Bases Conversion and Development Act (RA 7227); Special Economic Zone Act of
1995 (RA 7916) and other incentive laws.

The government imposes and collects the following taxes and levies:

A. Under the National Internal Revenue Code

1. Income Taxes (Individual and Corporate)


2. Capital Gains Tax on Transfer of Real Estate and/or Stocks
3. Treatment of Fringe Benefit
4. Estate and Donor’s Taxes
5. Value Added Tax
6. Other Percentage Taxes (Common Carrier’s Tax; Overseas
Communication Tax; Franchise Tax; Tax on Banks and Non-Bank
Financial Intermediaries; Tax on Finance Companies; Tax on Life
Insurance Premium; Tax on Amusement Activities; Tax on Winnings;
Tax on Sale of Shares of Stocks Listed and Traded Through Local
Stock Exchange or Through Initial Public Offering
7. Excise Taxes
8. Documentary Stamp Tax

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B. Under the Tariff and Customs Code

1. Import Duties
2. Export Duty

C. Under the Local Government Code of 1991

1. Real Property Taxes


2. Business Taxes, Fees and Charges
3. Professional Tax
4. Community Tax
5. Tax on Banks and Other Financial Institutions

D. Under Special Laws

1. Motor Vehicle User’s Charge


2. Travel Tax
3. Head Tax
4. Charges on Forest Products
5. Energy Tax on Electric Power Consumption

It is hoped that this Tax Guide will contribute towards raising the level of tax
consciousness among our people, promoting better tax compliance and ensuring
sustained growth.

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