FINALS

TAXATION
Taxes are the lifeblood of the nation.
Without taxes, government can neither exist nor endure.
Taxation is in Accord with the Bible
Jesus said to them, “show me a silver coin. Whose face and name are these on it?” “The Emperor’s,”
they answered. So Jesus said, “well then, pay to the Emperor what belongs to the Emperor and pay to
God what belongs to God.”

Taxation
An inherent power of sovereign.
Imposes burden upon persons and property.
Raises revenues for public purposes.

Power to Tax Includes the Power to Destroy

According to CJ Marshall, taxation is a destructive power which interferes with the personal and
property rights of the people as it takes from them a portion of their property for the support of the
government.

Power to Tax Not Power to Destroy

According to Justice Holmes brushed aside Marshall’s view by declaring that “the power to tax is not
the power to destroy while this Court sits.

Reconciliation of Marshall’s View with Holmes View

A valid tax should not be judicially restrained merely because it would prejudice taxpayer’s property.
An illegal tax could be judicially declared invalid.
Philippine Tax Laws
National Tax Laws
NIRC and Tariff and Customs Code
Local Tax Laws
Local Government Code on Local Tax Ordinances
Miscellaneous Tax Laws

Power of Judicial Review in Taxation

As long as the legislature, in imposing a tax, does not violate applicable constitutional limitations or
restrictions, the courts cannot inquire into the wisdom of a taxing act.
The Court’s power in taxation is limited only to the application and interpretation of the law.
TAXES
A burden or charge imposed by legislative power upon persons or property to raise money
for public purposes.

CHARACTERISTICS OF TAXES
An enforced contribution
Generally payable in money
Levied on persons, property or exercise of a right or privilege
Levied by state having jurisdiction
Levied by legislature
Levied for public purpose
Paid at regular a periods or intervals

CLASSIFICATION OF TAXES
1. Personal poll or capitalization)
Imposed on all residents, whether citizens or not
Ex. Community tax
2. Property
Imposed on property Ex. property tax
3. Excise
Imposed upon performance of an act, the enjoyment of a privilege or the engaging in occupation
Ex. income tax, estate tax, donor’s tax

WHO BEARS THE BURDEN

Direct
Personal taxes due from natural persons, non-transferable.
Ex. Income tax, donor’s tax, estate tax
Indirect
Business taxes due from either natural or juridical persons transferable.
Ex. VAT, documentary stamp tax)
IMPOSING AUTHORITY
National
Taxes imposed by national government.
Ex. NIRC taxes
Local
Taxes imposed by local government units.
Ex. community taxes, business licenses and permits, professional tax, real estate tax

TAX LAWS IN GENERAL

Sources
Philippine Constitution
Existing tax laws of the Philippines (National, Local and Miscellaneous tax laws).
Escape from Taxation
Tax evasion - A tax evader breaks the law.
Tax avoidance - The tax avoider sidesteps it.

LIMITATIONS ON THE POWER OF TAXATION

There are no limitations upon the power to tax.
To prevent abuse on the exercise of the otherwise unlimited power of taxation.
To serve as a standard for determining whether a tax law or an act of the taxing authorities in the
implementation of tax laws is valid or not.
Constitutional limitations
These are the restrictions imposed by the constitution.

TAX EXEMPTIONS
An exemption from taxation may be defined as a grant of immunity, express or implied, to particular
persons or corporations from the obligation to pay taxes.

Kinds of Tax Exemptions

Constitutional Exemptions
Immunities from taxation which originate from the Constitution.
Statutory Exemptions
Are those which emanate from legislation
Selected Principles Governing Tax Exemptions
Exemptions from taxation are highly disfavored in law.
He who claims exemption should prove by convincing proof that he is exempted.
Constitutional grants of tax exemption are self-executing.
Tax exemptions are personal.

GENERAL PRINCIPLES OF INCOME TAXATION IN THE PHILIPPINES OR THE SOURCE

RULE OF INCOME TAXATION FOR AS PROVIDED IN THE NIRC OF 1997.
A citizen of the Philippines residing therein is taxable on all income derived from sources within and
without the Philippines.
A nonresident citizen is taxable only on income derived from sources within the Philippines.
An individual citizen of the Philippines who is working and deriving income abroad as an overseas
contract worker is taxable on income from sources within the Philippines.
An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from
sources within the Philippines.

ISSUES ON TAXATION IN THE PHILIPPINES

Taxation started during the Spanish time in the Philippines.
The Filipinos were compelled to pay tribute for the administration of the country, construction of
churches, government buildings, roads, bridges and improvement of transportation and communication.

The tribute was 8 reales is equivalent to 12 centavos but was raised to 10 in 1602, then increased to 12 in
1851.
Those who required to pay taxes were individuals from 16 years old to 60 years old.
Unmarried man over 20 years old and unmarried women over 25 years old paid half of the tribute.

Native did not like the way the tribute was collected because the encomenderos became very wealthy
and reaped huge profit from it.
The King of Spain abolished it in 1884.
In its place the cedula served as an income tax and personal identification of the inhabitance.
The bandala is the compulsory sale of farmer’s farm products to the government, but in many cases, the
products were not paid for.
The Philippines today, there are two kinds of taxes.
National taxes are imposed by the national government through National Internal Revenue Code, Tariff
and Customs Code.
Local taxes are collected by the local government units (LGUs) based on Local government Code.

GLOSSARY

Taxation - a term for when a taxing authority, usually a government, levies or imposes a tax. 

Torrens title - is a land registration and land transfer system, in which a state creates and maintains a
register of land holdings, which serves as the conclusive evidence of title of the person recorded on the
register as the proprietor, and of all other interests recorded on the register. 

REFLECTION

ASSIGNMENT

How would you explain the system of taxation in the Philippines despite all items are taxed? Does it
help the government in providing the basic services to the people? Justify your answer

Psalms 90:12
Teach us to number our days that we may gain a heart of wisdom. 
FILIPINO CULTURAL HERITAGE
The Filipino culture is a summation of indigenous forces and foreign influences that had come to bear
upon the people in varying degrees during the last centuries.
This assimilated in a selective way, and this process of an acculturation varied from region to region.

The Arab influence

About 200 years before the Spanish arrived in the Philippines, the Arabs traded and settled in the
Philippines.
Words such as apo (grandchild), alamat (legend), sulat(letter) and Salamat (thank you), came from the
Arabic language.
Arabs introduced the use of calendars and Islam to the Filipinos.

The Japanese influence

The Japanese traders first settled in the archipelago during the 12th century AD.
Historical records show that Japanese traders, especially those from Nagasaki, frequently visited the
Philippine and bartered Japanese goods for such Filipino products as gold and pearls.
The relatively light complexion of Bontoc and Banaue is probably a result between the Japanese and the
natives of the Cordillera.

The Malays
The component of Filipino culture is the Malay temperament which could best be described by niceness
and pleasantness to others rather than by virtue of law abiding features.
The Malay family clan or unit is the world’s best security system.

The Chinese
Filial piety between parents and children the flexibility to go along with other people and the sageliness
within and the kingliness without of the Filipino is believed to be due to Chinese influence.

The Indian influence

Indian influence is found in the languages, mode of dressing, architectural art, beliefs, brass, and
copperware.

The Hindu influence

The most pervasive in the Filipino belief system.
For instance is the prediction of Filipino newspaper readers for horoscope and fortunetelling sections.

The Spanish heritage

It is reflective of more developed societies at their point of contact, broadened the outlook of the
Filipino.
Spain introduced a community oriented rather than a family oriented religion in the form of Christianity.
It contributed to an elite class.
A social and political organization, according to western institutions brought into the Philippines.

The Americans
This heritage by introducing a democracy that called for individual liberty and equality as well as a
national political community to which everybody to participate through national suffrage.
THE FILIPINO CULTURE
Filipinos are religious.
They believe so much in supernatural powers and view themselves as only a speck in this wide universe.
This Filipino belief in the supernatural powers taught them to trust prayers rather than hard work in the
realization of their dreams.
Success is considered a blessing from above.
It taught him to value traits like perseverance, patience, and endurance.

Value System
Values actually guide man’s behavior and action as he relates himself in most situations in life.
The Filipino values can best be seen from the aspects of personal and social relationships.
Majority of them takes care of their honor (karangalan) rather than wealth.
In decision making, the Filipinos usually consult the consensus of the family members.

THE FILIPINO VALUES

Utang-na-loob
It is a technique of reciprocity of debt of gratitude to others within the family circle or primary group,
sometimes unlimited rather than financial or rational.
Pakikisama
It is the value of belongingness and loyalty to the small in-group with sensitivity to the feelings of others
on the principle of give and take.
It is concept of good public relations and avoidance of conflict.

Filipino Indolence
Jose Rizal stated the Filipinos in general are indolent people.
There are Filipinos who do not care of their future.
They prefer to play games of chance gambling.

Hiya
A large extent the behavior of the individual and most likely, is generally dependent on what others will
think, say, and do.
Filipino cannot say “NO” even if it is against his will to do what is being requested.

Bahala na
A common expression on the fatalistic outlook and strong dependence on the spirits who will take care
of everything if they are really meant for a person.
Amor-propio
It is the individual’s highly emotional reaction to protect his honor and dignity when they are threatened
or questioned and to retaliate.
Hele hele bago quire, or pakipot which shows at the outset a person initially refusing an offer even if he
really wants very much to accept it.

Ningas-Cugon
Filipinos are very eager and ready to do and finish a work but after some time, they became complacent
and lazy at the end.
It is like a cogon grass that easily kindle and burn and nothing is left.

Manana Habit
It is the tomorrow-attitude or procrastination attitude.
People set aside their work for tomorrow what they can already do today.
People can accomplish many things if they only make use of their time profitably.

Gambling
A favorite pastime of Filipinos which has more negative effects than positive ones.
Jueteng, tongits, cara y cruz, sabong are some forms of gambling that brings negative effects especially
to young ones.

Lagay and Areglo

A socio-political connections for some material consideration to be able to obtain favors.
These negative practice occurs in government offices where special privileges and favors may be
obtained in return for which certain considerations are
exchanged.
Palakasan scheme
Is a system where you are allowed to get a job without hassle only if you’re a family member, good
friends with, or referred by someone you know from the inside.
This is a common knowledge, an open secret to every Filipino, most especially in the world of politics.

SUPERSTITIONS OF THE FILIPINOS

Early Filipinos believed in Aswang (witch)
Dwende (tiny creatures like humans)
Kapre (tall and apelike usually found on trees.
Mangkukulam (an old lady capable of harming others using a doll and a pin).
Tikbalang (half-man and half-horse creature)
Tiyanak (a baby that sucks blood on human.
Believed in magical power of anting-anting, and the use of gayuma or love potion.

Gaya Gaya Practice

It refers to the Filipino imitativeness which gives rise to emphasis on façade, palabas, pakitang-tao,
pagyayabang.

Karma
A word meaning the result of a person's actions as well as the actions themselves.
What happens to a person, happens because they caused with their actions.

Fatalism
It refers to the belief that all events are naturally and supernaturally Predetermined the mental attitude of
submission to the inevitability of the power of fate or the acceptance of one’s fate with, stoicism or
lethargy.
Use of phrases such as itinalaga ng Diyos, iginuhit ng tadhana, gulong ng palad, malas, napasubo.

GLOSSARY
Cultural Heritage - an expression of the ways of living developed by a community and passed on from
generation to generation, including customs, practices, places, objects, artistic expressions and values. 

The culture of the Philippines comprises a blend of traditional Filipino and Spanish Catholic traditions,

with influences from America and other parts of Asia. The Filipinos are family oriented and often
religious with an appreciation for art, fashion, music and food.

REFLECTION

ASSIGNMENT

How would you explain the different cultural traits of the Filipinos? How did it affect their way of life in
the present time?

Mark 9:23
Jesus said to him, If you can believe, all things are possible to him that believes.
VIII. FILIPINO AMERICAN RELATIONS
The United States intended to occupy the Philippines with the least violence and govern the country for
the interest and welfare of the Filipinos.
President McKinley ordered the military commander, General Wesley Merritt to establish a military
government in the Philippines.
It was succeeded by General Elwell Otis as military governor.
Otis remained in his post up to May 1900, and was succeeded by Arthur McArthur

SPANISH AMERICAN WAR

Spain and the United States involved in the Cuban Independence and sinking the Battleship Maine at
Havana harbor February 18, 1898.
Cuba supported by the United States due to big investments.
The United States supported the Cubans because the latter's liberation from Spain would benefit their
trading interests.

February 15, 1898, the warship Maine of the Americans was blown up in the
Port of Havana.
May 1, 1898, the fleet of Commodore George Dewey destroyed the Spanish fleet led by Admiral
Montojo.

May 17, 1898, Emilio Aguinaldo left Hong Kong aboard the US ship McCulloch.
He was assured by Dewey that the US had no plans to colonize the Philippines, unknown to him, US
forged an agreement with General Fermin Jaudines.

FILIPINO AMERICAN COLLABORATION

Emilio Aguinaldo was in Singapore and negotiated Consul E. Spencer Pratt.
United States would recognized the Philippine Independence after defeat of Spain.
Aguinaldo returned to Manila to fight the Spaniards together with Felipe Agoncillo,
and others.

SPANISH-AMERICAN SECRET AGREEMENT

General Fermin Jaudenes was hopeless in the face of the Filipino and American Forces.
The Spaniards would surrender to the American troops.
The Filipinos would not be allowed to participate in the Spaniards surrender.
Dewey and Merritt accepted the terms even if it is a treachery their ally, Gen. Aguinaldo.

Began on August 13, 1897 at around 9:30 am by the bombing of Olympia in Fort San Antonio Abad.
General Greene's forces attacked from Malate.
General Arthur MacArthur troops advanced from Singalong.

The Peace Commission is composed of:

5 Spaniards:
Eugenio Montero Ríos
Buenaventura de Abarzuza
José de Garnica
Wenceslao Ramírez de Villa
Urrutia Rafael Cerero
5 Americans:
William R. Day
William P. Frye
Cushman Kellogg Davis
George Gray, Whitelaw Reid

AMERICAN PERIOD
December 10, 1898
Treaty of Paris was signed provided as document that follows;
1. Spanish withdrawal from Cuba
2. Prevention of the U.S. from taking Cuba
3. Spain ceded Guam, Philippines, Puerto Rico to the U.S
4. U.S. would pay 20 million dollars to Spain as an agreement.

McKinley’s Benevolent Assimilation

December 21, 1898, President McKinley made his benevolent assimilation proclamation.
He announced that the US would enforce its sovereignty over the Filipinos.
He also ordered his military chief in the Philippines to extend US rule in the country.
The revolutionary government had taken hold of the proclamation, they immediately condemned it.

Assimilation Proclamation was issued by President William McKinley to exercise sovereignty over the
Philippines as a colony.

Reasons were the following;

1. American business interest
2. Military & Naval a base for American Defense
3. Propagation of Protestantism in the country

Benevolent Assimilation
The policy declared which states that it is the manifest destiny of the Americans to protect the salary,
freedom and progress of the Filipino people.

Aguinaldo protested against the harsh US invasion over a part of the territory of the Philippines.
In a revised proclamation on the same day, Aguinaldo opposed the US intervention on the sovereignty
of the islands.
He warned that the Filipino Government was prepared to fight should the US troops attempt to colonize
the islands in the Visayas.
General Otis considered Aguinaldo‟s proclamations as challenges to war.

THE OUTBREAK OF FILIPINO AMERICAN WAR

The flames of war were ignited on the eve of February 4, 1899.
Private Willie Grayson's group patrolled at San Juan.
Grayson fired at a Filipino soldier, prompting an exchange of fires between two groups.

Lazaro Segovia reveals Aguinaldo’s hideout in Palanan, Isabela. April 19, 1901
President Aguinaldo took the oath of allegiance to the U.S.
Appeal to all Filipinos to accept the sovereignty of the U.S.

In order to capture not just Aguinaldo, the Americans made an extra effort to use wealthy Filipino
traitors.
Finally, Aguinaldo fell into the hands of Americans, but the other generals continued the struggles.
130,000 US troops seven thousand were killed and wounded vs 7 M Filipinos more than 50,000 were
killed).
They used several methods of cruelty massacre, rape, zoning, torture and concentration camps.

Guerilla warfare ended with the surrender of Miguel Malvar in order to save his people from the enemy
and from hunger for Macario Sakay it’s the same thing.
September 1903 the last revolutionary to surrender was Simeon Ola.

U.S. OBJECTIVE IN COLONIZING THE PHILIPPINES

The Americans needed new market for their products.
They were also on the lookout for new sources of cheap raw materials.
The US hoped to use the Philippines as its base in its drive to control the entire Pacific Ocean and other
countries.
However, President McKinley and President Wilson made the Filipino believe that the Americans
intention was to teach democracy and governance.

ECONOMIC POLICIES
The American colonial government expanded and speeded up the production of raw materials like sugar,
coconut, wood products etc.
Philippine exports to the U.S. increased in 1913, after free trade was implemented.
The free trade made our economy focused on exporting raw materials while importing expensive
manufactured goods.

American government pushed landless peasants for the

cultivation of more farmlands to further boost productions.
To quell the peasants uprising in 1903, they brought lands from friars and implemented the Homestead
Act so people could avail titles for the lands they started to farm.
Landlords continued to exact rents or levy duties from their tenant farmers.

POLITICAL POLICIES
The Civil Government
Pres. McKinley had sent two Philippine Commissions tasked to establish a civil government.
The Philippine Commission composed mostly of American civilians and military personnel, performed
the executive and legislative functions.
Dr. T.H. Pardo Tavera, Felipe Buencamino and Dr. Pedro Paterno among others founded the first
political party, the Partido Liberal, which called for collaboration with the U.S.

The Philippine Commission passed the Sedition Act, which imposed imprisonment and the death
penalty to anyone advocating freedom or separation from the U.S. even through peaceful means.

The Philippine Assembly was established in 1902 and served as the Lower Chamber.
It took on the roles of facilitating tax collection and allocating government revenues.
1901, the U.S. colonialists formed the Philippine Constabulary which was headed by American officials
until 1917.

CULTURAL POLICIES
Democracy and Protestantism the greatest legacy of Americans to the Filipinos.
Jazz, Swing, Waltz, Marches & Sonatas for piano & violin.
Protestant Christianity was introduced in 1899 C.B. Randall distributed the first bibles.
James Thoburn gave the first sermon in the country.
Mr. & Miss or Ma’am as a gesture for men & women

The Americans established the public educational system that used English as the medium of
instruction.
As schools were established, the Americans gave away free books, supplies, candies and chocolates to
encourage the children to attend.
The first teachers were the American soldiers followed by trained teachers who arrived in the country
aboard the SS Thomas.

1903; Charles M. Swift established the Meralco (Manila Electric Railroad & Lighting Company).
PLDT was established by Act No. 3446 in 1928.
Philippine Military Academy was the first military school from Intramuros was moved to Baguio.

1910; Philippine General Hospital (PGH) was

Activities like baseball, and other amusement.
Sculpture of Andres Bonifacio Monumento in Caloocan and the Oblation
of the University of the Philippines was done by Guillermo Tolentino.

Daniel H. Burnham
Build the famous zigzag road going to Baguio.
Built the famous Burham Park.

THE SEEDS OF COMMUNISM

Tan Malaka arrived in 1929 to form the Communist Party of the Philippines (CPP).
Crisanto Evangelista became the President and Jacinto Manahan Vice President.
The Congreso Obrero de Filipinas formed the Katipunan ng Anak Pawis ng Pilipinas.
November 7, 1930; held first public rally at Plaza Moriones Tondo Manila.

Held rallies at Caloocan Plaza on Labor Day May 1, 1931 but they were forcibly dispersed.
*Crisanto Evangelista was detained by certain Captain Jaladoni.
*Pedro Abad Santos from Pampanga founded the Socialist Party and the Party became the political
arm.

PHILIPPINE COMMONWEALTH
*1916 Jones Law introduced by William Atkinson Jones for Philippine Independence and specifies the
tree branches the Executive, Legislative and Judiciary.
*Hare Hawes Cutting Law was a ten-year period known as the Commonwealth Period except in foreign
affairs.

ISSUES ON FILIPINO AMERICAN RELATIONS

Filipinos oversaw the affairs of the gov’t but still, all major decisions had to be approved first by the
U.S.
Philippine exports to the U.S. increased in 1913, after free trade was implemented.
130,000 US troops seven thousand were killed and wounded vs. 7 M Filipinos more than 50,000 killed.
They used several methods of cruelty, massacre, rape, zoning, torture and concentration camps.
The US use the Philippines as its base in its drive to control the entire Pacific Ocean and other countries.

Free trade was extended until Dec. 31, 1960

The Philippines became dependent exclusively on the United States to continue prosper economically.
There was no real industrialization in the hands of Filipino capital.
Our own delicacies and heroes are no longer appreciated.
Filipino people focus about American culture.

DID YOU KNOW?

COCA COLA
July 1886, pharmacist John Stith Pemberton from Columbus, Georgia invented the original Coca-Cola
drinks which was advertised as helpful in the relief of headache, to be placed primarily on sale in
drugstores as a medicinal beverage.

JAZ COLA
Jaz Cola is a brand of cola produced by Coca-Cola Company
The beverage is only available in the Philippines and made for people in the Visayas which is a group of
islands in the Philippines.
Jaz Cola has reportedly fueled Visayan pride among its teen consumers.”

MALACANANG
Came from the Spanish word Malakanyang, Palacio de Malacanan, is the residence of the President of
the Philippines located in the city of Manila.
A Bahay na bato neoclassical style.
Built in 1750 by Don Luís Rocha as summer house along the Pasig River.
Purchased in 1825 as the summer residence for the Spanish Governor-General.

REFLECTION
ASSIGNMENT

1. What is the significance of the Philippine Assembly during the American occupation?
2. What were the negative consequences of American rule in the Philippines? Explain briefly.
3. Why did US want Philippines?

Romans 10:17 - So faith comes from hearing, and hearing through the word of Christ.