Professional Documents
Culture Documents
CHAPTER INTRODUCTION
This chapter focuses on the issues in the Philippine society, which history could
give a clear understanding and thereby give solutions. The topics included in the
discussions are mandated: the Philippine Agrarian Reform policies, Philippine
Constitutions, and Taxation. It is expected that these discussions will help as propose
recommendations or solutions to present-day problems based on our understanding of
the root causes and how we anticipate future scenarios in the Philippine setting.
VALUE/THRUSTS INTEGRATION
Equitable distribution of wealth; Social justice
B. SPANISH PERIOD
• Through the Laws of the Indies, the Spanish crown awarded vast tracts of land
to:
a) Religious orders (Friar lands)
b) Spanish military as a reward for their service; (Repartiamentos) and
Spaniards (Encomienda)
c) Natives within these areas became mere tillers working for a share of
crops and they did not even have any rights to the land.
4. Friar lands
• Another source of friction in the late 19 th century were the amount of land held in
grant from the Spanish crown by the religious orders;
• Friars were not only granted encomienda but the authority to rule over the new
domain that friar lands came into being.
D. COMMONWEALTH PERIOD
Manuel Quezon implemented the Rice Share Tenancy Act of 1933 (Act No. 4054)
• This is to regulate the share-tenancy contracts
• The Act provided for better tenant-landlord relationship, a 50-50 sharing of the
crop, regulation of interest to 10% per agricultural year, and a safeguard against
arbitrary dismissal by the landlord.
• The major loophole of this act was that it could be used only when the majority of
the municipal councils in a province petitioned for it.
• Since landowners usually controlled such councils, no province ever asked that
the law be applied.
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• Took upon the cause of peasants against the landlords, who often collaborated
with the Japanese to maintain their position led by peasant charismatic leader Luis
Taruc.
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MAGSAYSAY ADMINISTRATION (1953-57)
• RA No.1160 (1954)- Free distribution, resettlement, and rehabilitation of
agricultural lands, an act abolishing LASEDECO and establishing National
Resettlement Rehabilitation Administration (NARRA) to resettle dissidents and
landless farmers.
• The Agricultural Tenancy Act of 1954 (RA 1199) - Provided security of tenure
for tenants; Allowed tenants to shift from share tenancy to leasehold
• In the leasehold system, a tenant paid a fixed amount to the landlord instead of a
variable share.
• This act prohibited the ejection of tenants, unless the Court of Agrarian Relations
found a just cause.
• Republic Act No. 821 (Creation of Agricultural Credit Cooperative Financing
Administration) - provide small farmers and share tenants’ loans with low interest
rates of six to eight percentage.
• Republic Act No. 1266 (1955) - expropriated Hacienda del Rosario situated at
Valdefuente, Cabanatuan City.
• The Land Reform Act of 1955 (RA 1400)
o Provided for the expropriation (to take possession of for public use) of
private agricultural land over 300 hectares of contiguous areas, if owned by
individuals.
o However, it allowed expropriation regardless of hectares in places where
there was justified agrarian unrest.
o Loophole: it prohibited the possession of lands less than the stated limits.
o Exempted many landowners who had large but parceled out landholdings.
o The law allowed only the possession of lands when the majority of tenants
petitioned for land purchase.
o known as land to the landless program;
o Created the Land Tenure Administration (LTA) responsible for the
acquisition and distribution of large tenanted rice and corn lands over 200
hectares for individuals and 600 hectares for corporations.
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GARCIA ADMINISTRATION (1957-61)
• He did not make any law or major pronouncements on agrarian reform.
• It was then believed that at the rate of progress maintained under Magsaysay
and Garcia, it would have taken about 70 years to repurchase and redistribute
the 1.8 million hectares of tenanted agricultural land in the Philippines.
MARCOS ADMINISTRATION
Pre-Martial Law (First Term, 1965-69)
• Agricultural Land Reform Code of Macapagal was implemented
• Faster land purchase and redistribution compared to the Macapagal
• No Agrarian Law was made
• Amendments to the Agricultural Land Reform Code of 1971 (RA 6389)
• Right of tenants to have a disturbance compensation on land converted to
residential subdivision which is equivalent to five times the average gross harvest
for the past three agricultural years
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• RA No. 6390 of 1971- Creation of the Department of Agrarian Reform (DAR)
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RAMOS ADMINISTRATION (1992-98)
• No new agrarian reform law was passed by Congress.
• Ramos speeded up the implementation of CARP.
• RA 7881- AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM
PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION,
PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER
PURPOSES
• EO 363 - Limits the type of lands that may be converted by setting conditions under
which specific categories of agricultural land are either absolutely non-negotiable
for conversion.
• R.A. 8435, 1997 (Agriculture and Fisheries Modernization Act or AFMA) – plugged
the legal loopholes in land use conversion.
• R.A 8532, 1998 (Agrarian Reform Fund Bill)- provide another 50 Billion for CARP
and extended its implementation for another 10 years.
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convergence strategy aimed at achieving asset reform, poverty reduction, good
governance, social equity, and empowerment of agrarian reform beneficiaries
(ARBs).
• Signing of the Comprehensive Agrarian Reform Program Extension and Reforms
(CARPER)
• Amended certain provisions of the 1988 CARL
• Extended the CARL to five more years and allocated more funds for the
implementation of the CARP.
• CARP will continue even when all landless farmers have owned a piece of
agricultural land
• CLEAR POLICY AGAINST CONVERSION OF AGRICULTURAL LANDS
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• Provides agrarian legal assistance and oversees the adjudication of cases.
• Under Section 19 of RA 97600 (Section 50 of RA 6657 as amended), the DAR is
hereby vested with the primary jurisdiction to determine and adjudicate agrarian
reform matters and shall have exclusive original jurisdiction over all matters
involving the implementation of agrarian reform except those falling under the
exclusive jurisdiction of the Department of Agriculture (DA) and the Department of
Environment and Natural Resources (DENR).
Agrarian Production Credit Program (APCP) provided credit support for crop
production to newly organized and existing agrarian reform beneficiaries’
organizations (ARBOs) and farmers’ organizations.
The Legal Case Monitoring System (LCMS), a web-based legal system for recording
and monitoring various kinds of agrarian cases at the provincial, regional and central
offices of the DAR to ensure faster resolution and close monitoring of agrarian-related
cases, was also launched.
Executive Order No. 26, Series of 2011- mandate the Department of Agriculture-
Department of Environment and Natural Resources-Department of Agrarian Reform
Convergence Initiative to develop a National Greening Program in cooperation with
other government agencies.
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into law by former President Corazon C. Aquino, and implemented the government
program known as Comprehensive Agrarian Reform Program (CARP).
• Concept. It provides not only for land distribution but also for appropriate support
services. It ensures the viability of the beneficiaries as independent small farmer-
landowners.
• Coverage. It covers not only private lands but also public lands of public domain
which are classified as agricultural regardless of the crops planted and tenurial
arrangement.
• Beneficiaries. Both the farmers and the landowners stand to benefit. The farmers
will own the land they till and the landowners will amply compensated and provided
with necessary capital to reinvest in the industry.
COVERAGE:
o all agricultural lands
o idle, foreclosed, or sequestered lands
o voluntary transfer
o lands to be expropriated
o sequestered agricultural properties
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AGRARIAN REFORM COVERS THE FOLLOWING ELEMENTS:
• Distribution of land to the cultivator
• Security of tenure and fair system of rental payments
• Improved methods of cultivation through the improvement of rural institutions
serving the farmers such as:
• Adequate credit
• Cooperative marketing
• Agricultural investment
OBJECTIVES OF CARP
• seeks to eliminate feudal relations
• emancipate tenants from the bondage of soil
• promote agrarian peace
• divert landlord capital to a more productive industrial ventures
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PRINCIPLES BEHIND AGRARIAN REFORM
• The fundamental principle behind agrarian reform is social Justice.
• Provision of just compensation defined as the full and fair equivalent of the property
taken away from its owner by expropriation.
RETENTION LIMITS
• RA No. 6657 provides that the landowners shall retain not more than 5 hectares
of agricultural land.
• PD No. 27 allows landowners to keep the area originally considered as homestead
at the time of the approval of RA 6657. They can retain the same area as long as
they continue to cultivate them.
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• Forest revenues
• Fish sanctuaries
• Breeding grounds
• Watersheds and mangroves
BENEFICIARIES OF CARL
• agricultural lessees and share tenants
• regular farm workers
• seasonal farm workers
• other farm workers
• actual tillers
• others directly working on the land
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IMPORTANCE, ASPECTS, AND COMPONENTS OF AGRARIAN REFORM
1. ASPECTS OF AGRARIAN REFORM
a. Economic Aspect
• Agrarian reform will help improve agricultural productivity to accelerate general
economic development.
• Increased efficiency in food production means more and better food for
everyone. Unemployment is resolved.
b. Socio-cultural Aspect
• Because of a sense of ownership, farmers are transformed to become leaders
because they enjoy the benefits of their own farm.
• Farmers will become more active and productive in leadership roles and nation-
building.
c. Religious Aspect
• Everyone must enjoy the fruit of having a piece of land to till.
• Land is given by God for everyone to enjoy.
d. Moral Aspect
• Unequal distribution of wealth and power to only few persons.
• The ignorant and poor farmers are abused
e. Legal & Political Aspect
• Formulation of laws are enacted to regulate the abuse existing between landlords
and tenant-farmers
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• Suitable barangay sites
• Potable water and power resources
• Price support of products
• Collateral-free loans
• Financial assistance to small scale industries
• Research and development on low cost-technologies to minimize reliance on
expensive and imported agricultural inputs
• Development of cooperative management skills through intensive training
• Assistance in various aspects of marketing
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LESSON 2 – THE EVOLUTION OF THE PHILIPPINE CONSTITUTION
VALUE/THRUSTS INTEGRATION
Knowing our rights; freedom; patriotism and nationalism
INTRODUCTION:
A constitution is defined as the fundamental law of the land or the State and
establishes the character and basic principles of the government. The Constitution is
codified into a single written document which forms the fundamental rules and principles
by which the State is managed and governed. It is in the same principles that make clear
the rights of the individual and creates limitations to government power.
The Constitution of the Philippines is the supreme law in which all laws, statutes,
and ordinances must conform to. The 1987 Philippine Constitution is our present
constitution that governed our country wherein some of its provisions were taken from our
previous constitutions starting from Malolos up to 1973 constitutions.
Hence, this topic is mandated to be taught in General Education Course 2 for the
students to enhance their understanding on how our present constitution came into being.
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ordinance selling cigarettes within 100 meters from school premises. Is the violation
covered by the Constitution or not? We will find out as you read the content of the lesson
whether it is part of a statute or constitution. Let’s proceed to our lesson.
INTRODUCTION
As part of the evolution of the Philippine government, several constitutions were
enacted, either as mandated by the changing needs of the times, or as needed to satisfy
the desires, whims and caprices of the one holding the reigns of political life.
CONSTITUTION DEFINED
• That body of rules and principles in accordance with which the powers of the
sovereignty are regularly exercised; it covers both written and unwritten
constitutions.[Cooley, Constitution Limitations, p. 4].
• the fundamental and supreme law of the land
• Basis of all the other laws in the land;
• Serves as a guide to the government in making decisions;
• A written instrument by which the fundamental powers of the government are
established, limited and defined, and by which these powers are distributed among
the several departments or branches for their safe and useful exercise for the
benefit of the people. (de Leon, 2011).
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• It is the law to which all other laws must conform and in accordance with which all
private rights must be determined and all public authority administered.
• It is the test of the legality of all governmental actions, whether the proceeding from
the highest official or lowest functionary.
2. Establishes basic framework and underlying principles of government
• The constitution is also referred to as the organic or basic law being or relating to
the law by virtue of which the government exists as such.
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fundamental character, judicial decisions, commentaries of publicists, customs
and traditions, and certain common principles [Cruz, Constitutional Law, pp. 4-5]
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ESSENTIAL PARTS/AS TO CONTENT OF A GOOD WRITTEN CONSTITUTION:
a. Constitution of Liberty. The series of prescriptions setting forth the fundamental
civil and political rights of the citizens and imposing limitations on the powers of
government as a means of securing the enjoyment of those rights, e.g. Art. III.;
b. Constitution of Government. The series of provisions outlining the organization
of the government, enumerating its powers, laying down certain rules relative to its
administration, and defining the electorate, e.g., Art. VI, VII, VIII and IX.
c. Constitution of Sovereignty. The provisions pointing out the mode or procedure
in accordance with which formal changes in the fundamental law may be brought
about, e.g., Art. XVII. [Nachura, Reviewer in Political Law, 2006, p.3]
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• Naic, Cavite March 22, 1897 Decree # 29- proclamation of the constitution “La
Constitucion Provisional De La Republica De Filipinas” Provision agreed:
o Separation of the Phil. from the Spanish monarchy and their formation into
an independent state with its own government. (Phil. Republic)
o It also contained a Bill of Rights to safeguard the human rights of the people
(Articles XXII to XXV).
o The form of government was adopted from the provisions of the constitution
formed in Jimaguaya, Cuba.
• The government formed was a Supreme Council composed of: President, Vice-
President, Secretary of Interior, Secretary of Foreign Relations, Secretary of War,
and a Secretary of Treasury.
• The sweeping powers of the council are: power to issue orders and other laws for
the security of the state; impose and collect taxes; raise an army; ratify treaties,
and convene an Assembly of Representatives.
• The official language was Tagalog and the Judiciary was vested in another
Supreme Council of Justice.
• This Constitution lasted for only two (2) years which was later on superseded by
laws and decrees made by Aguinaldo.
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o Vice-President : Benito Legarda
o First Secretary : Gregorio Araneta
o Second Secretary : Pablo Ocampo
• September 9, 1898-ratification of Phil. independence which was proclaimed on
June 12, 1898
• Convent of Malolos Church- Aguinaldo’s official residence
• June 18 and 23, 1898- Mabini conceived the Congress as an advisory body to the
President of the Revolutionary government
• A committee was formed to draft the constitution as a prelude to the establishment
of a republic
• Felipe Calderon was a member; his draft was approved; framer of the constitution
• October 8, 1898- Calderon presented his draft of the constitution
• October 25, 1898- Congress deliberated on the draft
• November 29, 1898- the constitution was sent to Aguinaldo for approval
• Mabini warned Aguinaldo of the provisions that will give Congress so much powers
and the President merely a puppet; he delayed the approval
• With the issues laid down by Mabini, pressures of the influential Manila elite,
reluctance of Aguinaldo, the constitution was modified
AMENDMENTS WERE MADE
• January 21, 1899- the Malolos Constitution was approved and proclaimed
• Malolos Constitution- first Filipino document produced by the people’s
representatives though not all members who drafted the constitution were elected
by the people
• Democratic constitution
• Republican in nature-popular and representative
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o It provided for the separation of Church and State.
o The administration of justice was vested in the Supreme Court.
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LIMITATIONS AND CONDITIONS: A CONSTITUTION DRAFTED SHOULD:
• Republican form;
• include a Bill of Rights;
• Contain certain provisions intended to define the relations between Philippines and
US during the Commonwealth period.
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4. THE 1943 PHILIPPINE CONSTITUTION (1943 Constitution- 12 Articles)
• With the occupation of Manila, the Commander in Chief of the Japanese Forces
proclaimed, on January 2, 1942, the military administration over the territory
occupied by the army, and ordered that “all the laws now in force in the
Commonwealth, as well as executive and judicial institutions shall continue to be
effective for the time being as in the past”.
• “all public officials shall remain in their present posts and carry on faithfully their
duties as before” Executive Orders Nos. 1 and 4, dated January 30 and February
6, 1942,
• Continued the Supreme Court, the Court of Appeals, the Court of First Instance
and Justices of Peace Courts, with the same jurisdiction, in conformity with the
later instructions given by the Commander-in-Chief of the Japanese Imperial Army
in order No. 3, dated February 20, 1942.
• Jorge Vargas was appointed by Gen. Homma as head of the Executive
Commission (Where Filipinos report)
• June 18, 1943- the Kapisanan ng Pagllingkod sa Bagong Pilipinas (KALIBAPI)
created to form the Preparatory Commission for Phil. independence
• Preparatory Commission- Pres. Jose Laurel, VP Benigno Aquino & Ramon
Avanceña;
• September 4, 1943- constitution was ratified
• September 23, 1943- election of the members of the legislature
• September 25, 1943- the legislature elected Jose Laurel as the President of the
Republic of the Philippines
• October 14, 1943- Second Republic was born with Jose Laurel as the President
• The Constitution was basically a condensed version of the 1935 Constitution
consisting of a Preamble and 12 Articles. It created a republic with three offices
(Executive, Legislative, and judicial) but due to war, no legislature was convened.
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• March 16, 1967, the Congress in joint session passed both Resolution on both
Houses (as amended by Resolution no. 4 on June 17, 1969) authorizing the
holding of Constitutional Convention in 1971.
• On August 24, 1970, R.A. No. 6132 was approved setting November 10, 1970 as
Election Day for 320 delegates of the Constitutional Convention.
• June 1, 1971, the Convention started rewriting the Constitution based on the 1935
Constitution, with reference to the Malolos Constitution, for the drafting of
amendments of the new Constitution, and signed on November 30, 1972.
• Approval by Citizens Assemblies
• Earlier on September 21, 1972 , the President of the Philippines issued
Proclamation 1081 placing the entire country under Martial Law ;
• P.D. No.81 was issued on December 31, 1972 creating a Citizens Assembly in
each barrio in Municipalities and in each district in chartered cities throughout the
country;
• Subsequently, P.D. No. 86-A was issued on January 5, 1973 defining the role of
the barangays (formerly citizens’ assemblies).
• Approval by Citizens Assemblies
• Pursuant to P.D. No. 86-A, the Barangays were to a referendum on National issues
between January 10-15, 1973.
• The ratification was according to presidential Proclamation No. 1102 issued on
January 17, 1973: 14,976,561 members of all barangays (Citizens Assemblies)
voted for the adoption of the Constitution, as against 743,869 who vote for its
rejection;
• this Proclamation certified and proclaimed that the constitution proposed by the
1971 CONCON has been ratified by the Filipino people and had thereby come into
effect;
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president as a ceremonial head of state. However, this was not implemented.
Instead, President Marcos continued to rule under martial law powers until 1981.
• The legislative powers would have been vested in a unicameral National Assembly
composed of assemblyman elected by the people.
• The 1973 Constitution emphasized the duties and obligations of citizens, as well
as their rights. Voting was made compulsory for qualified voters, and suffrage was
extended to illiterates and youth down to 18-year olds.
AMENDMENTS
• January 20, 1980, another plebiscite was conducted to ratify the amendments of
extending the retirement age of the justices of the Supreme Court from 65 – 70
years old, barring the liberal and progressive justices from becoming Chief Justice.
6. THE 1986 PROVISIONAL CONSTITUTION (The 1986 Constitution has Seven (7)
Articles)
• President Aquino issued Proclamation No. 3, March 25, 1986, announcing the
promulgation of the Provisional [Freedom] Constitution, pending the drafting
and ratification of a new Constitution.
• It adopted certain provisions of the 1973 Constitution, contained additional articles
on the executive department, on government reorganization, and on existing laws.
• It also provided for the calling of a new Constitutional Commission to be
composed of 30-50 members, to draft a new Constitution.
• The 1987 Constitution has eighteen (18) Articles
• The event that led to the adoption of 1987 Philippine Constitution:
▪ President Aquino issued the Proclamation No. 9, creating the Constitutional
Commission of 50 members under the presidency of former Justice Cecilia
Muñoz-Palma.
▪ Approval of draft Constitution by the Constitutional Commission on October
15, 1986.
▪ Proclamation No. 58, proclaiming the ratification of the Constitution.
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▪ Effectivity of the 1987 Constitution: February 2, 1987, the date of the
plebiscite when the people ratified the Constitution. [Nachura, Reviewer in
Political Law, 2006, pp 5-11]
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• Guarantee of Local Autonomy (Art. X, Sec. 2)
• Rule of the majority
• Government of laws and not of men
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3. Evelyn J. Grey, Ph.D. and Ryan D. Biong, M.A.Ed. Malones Printing Press and
Publishing House. Door 32, Zerrudo Commercial Complex. E. Lopez St., Jaro,
Iloilo, Philippines, 2017.
4. Jose Victor Torres. “BATIS: Sources in Philippine History.” C and E Publishing,
Inc. 839 EDSA, South Triangle, Quezon City, 2018.
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LESSON 3 – TAXATION
VALUE/THRUSTS INTEGRATION
Fair value; honesty
INTRODUCTION:
Taxation means laying a tax through which the government generates income to
defray its expenses. It is a way to raise funds for government program and services that
benefit Filipino citizens. A tax enforced as a contribution but it is proportionate to the
citizen’s ability to pay. It levied on persons and property as well as business transactions,
privileges, and benefits.
Thus, paying the right amount of taxes is a social responsibility to the country that
could probably use by the government in developing and improving its facilities for the
betterment of the life of the Filipinos. This topic will focus mainly on the historical
development of Philippine taxation; the concept, principles and its importance; and lastly,
the kinds of national and local taxes imposed by the government.
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INCULCATING CONCEPTS (INPUT/LESSON PROPER)
B. SPANISH PERIOD
1. The Tributo (tribute) and Cedula may be paid in any kind.
It was fixed at 8 reales and later, increased to 15. Ten reales goes to the
government, 1 to the town community chest and 3 to the church. Another one real
was for the tithes (diezmo pediales). Also collected is the vandala, an annual
enforced sale and requisitioning of goods such as rice. Custom duties and income
tax are also collected. Later, they imposed cedula personal or personal identity
paper wherein all Indios aged from 18 to 60 are obliged to pay for personal
identification. Polo is the forced labor for 40 days of men ranging from 16 to 60
years of age who were obligated to give personal service to community projects.
One could be exempted from polo by paying the falla, a daily fine of one and a half
real. In 1884, it was reduced to 15 days.
2. The encomienda system is a land management system similar to the feudal
system in Europe; A meritorious Spaniard (called an encomendero) is given
control over a piece of land and its inhabitants. The encomendero is duty-bound
to defend his encomienda and keep peace and order there. In return, he was
granted the right to collect tribute according to the limit. Part of this tribute goes to
the encomendero and the rest to the church and the government. This is subject,
however to several abuses.
3. The Manila-Acapulco Trade is generally a trade between the Chinese and
Spaniards in Manila and the Spaniards in Mexico. This has resulted into economic
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progress. But the negative effects of it far outbalanced the advantages. Some
income-producing economies were completely neglected and too much burden
were given to Filipinos during their annual polo y servicio.
C. AMERICAN PERIOD
• Americans aimed to make the economy self-sufficient by running the government
with the possible sum revenue and create surplus in the budget;
• From 1898 to 1903, the Americans followed the Spanish system of taxation with
some modifications
• Later on, the Urbana was replaced by tax on real estate, which became known as
land tax.
• The problem with the tax was that the land titling in the rural area was very
disorderly.
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Internal Revenue Law of 1904 was passed as a reaction to the problems of collecting
land tax. It prescribed major sources of revenue:
o License taxes on firms dealing in alcoholic beverages and tobacco;
o Excise taxes on alcoholic beverages and tobacco products;
o Taxes on Banks and banker;
o Documentary stamp taxes;
o Cedula;
o Taxes on business
o Taxes on insurance and insurance company;
o Taxes on forest product;
o Mining Concession;
o Tax on Business and manufacturing; and
o Occupational Licenses.
In 1913, the Underwood-Simmon Tariff Act was passed, resulting to a reduction in the
revenue of the government as export taxed levied on sugar, tobacco, and copra were
lifted.
a) New measures and legislation were introduced to make the taxation system
appear more equitable;
b) Income Tax rates were increased in 1936, adding a surtax rate on individual net
incomes in excess of 10,000 pesos;
c) Increased in the Income Tax rates of Corporation;
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6) Real Estate
7) Records
In line with the Filipinization policy of US President McKinley, Filipino collectors were
appointed. The first three BIR Collectors were: Wenceslao Trinidad (1918-1922); Juan
Posadas Jr (1922-1934); and Alfredo Yatao (1934-1938)
May 1921: by virtue of Act No. 299, the Real Estate, License and Cash Divisions were
abolished and their functions were transferred to the City of Manila. As a result of this
transfer, the Bureau was left with five (5) divisions, namely:
1) Administrative
2) Law
3) Accounting
4) Income Tax
5) inspection
In 1937, the Secretary of Finance promulgated Regulation No. 95, reorganizing the
Provincial Inspection Districts and maintaining in each province an Internal Revenue
Office supervised by a Provincial Agent.
In 1939, the Commonwealth government drafted the National Internal Revenue Code as
follow:
o Normal Tax of three percent and the surtax on income was replaced by a single
tax:
o Personal exemption were reduced;
o Corporation income tax was slightly increased
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o The cumulative sales income tax replace by a single turnover over tax of 10% on
luxuries:
o Taxes on liquors, cigarettes, forestry products; and mining were increased.
o Dividend were made taxable.
D. JAPANESE PERIOD
o The Japanese military administration in the Philippines during WWII immediately
continued the system of collection introduced during the commonwealth but the
exempted Japanese forces. Foreign trade fell, and the main sources of taxation
came from amusements, manufactures, professions, and business license. As
war raged, tax collection was difficult task, and additional incomes of the
government were derived from the sales of National Sweepstakes and sale of
government bonds.
E. POST-WAR PERIOD
o July 4, 1946 – declaration of Philippine Independence, BIR was established
separately that led to its reorganization on October 1, 1947 by virtue of Executive
Order No. 94.
o In January 1957, the position of the head of the Bureau was changed from
Collector to Commissioner. The last collector and the first Commissioner of BIR
was Jose Aranas.
o 1973 significant amendments were put into effect following the enactment of the
local tax code, with amendments on the allocation of the residence tax and on who
are covered under it, as well as payment provisions.
F. MARCOS ADMINISTRATION
o The appointment of Misael Vera as Commissioner in 1965 led the Bureau to a
"new direction" in tax administration.
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o The most notable programs implemented were the "Blue Master Program" and
the "Voluntary Tax Compliance Program". The first program was adopted to
curb the abuses of both the taxpayers and BIR personnel, while the second
program was designed to encourage professionals in the private and government
sectors to report their true income and to pay the correct amount of taxes.
o It was also during Commissioner Vera's administration that the country was further
subdivided into 20 Regional Offices and 90 Revenue District Offices, in addition to
the creation of various offices which included the Internal Audit Department
(replacing the Inspection Department), Administrative Service Department,
International Tax Affairs Staff and Specific Tax Department.
o Providing each taxpayer with a permanent Tax Account Number (TAN) in 1970
not only facilitated the identification of taxpayers but also resulted to faster
verification of tax records.
o The proclamation of Martial Law on September 21, 1972 marked the advent of the
New Society and ushered in a new approach in the developmental efforts of the
government. Several tax amnesty decrees issued by the President were
promulgated to enable erring taxpayers to start anew. Organization-wise, the
Bureau had also undergone several changes during the Martial Law period (1972-
1980).
o In 1976, under Commissioner Efren Plana's administration, the Bureau's
National Office transferred from the Finance Building in Manila to its own 12-storey
building in Quezon City, which was inaugurated on June 3, 1977.
o The same year that President Marcos promulgated the National Internal
Revenue Code of 1977, which updated the 1934 Tax Code.
o On August 1, 1980, the Bureau was further reorganized under the administration
of Commissioner Ruben Ancheta. New offices were created and some
organizational units were relocated for the purpose of making the Bureau more
responsive to the needs of the taxpaying public.
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G. AQUINO ADMINISTRATION
o After the People's Revolution in February 1986, a renewed thrust towards an
effective tax administration was pursued by the Bureau. "Operation: Walang
Lagay" was launched to promote the efficient and honest collection of taxes.
o On January 30, 1987, the Bureau was reorganized under the administration of
Commissioner Bienvenido Tan, Jr. pursuant to Executive Order (EO) No. 127.
Under the said EO, two (2) major functional groups headed and supervised by a
Deputy Commissioner were created, and these were: 1) the Assessment and
Collection Group; and 2) the Legal and Internal Administration Group.
o In 1988, the value-added tax (VAT) was implemented that aimed to promote and
encourage compliance with the requirements of the VAT was launched. The
adoption of the VAT system was one of the structural reforms provided for in the
1986 Tax Reform Program, which was designed to simplify tax administration and
make the tax system more equitable.
o The abolition of Revenue Information Systems Services Inc. (RISSI) in 1988 and
transferred back to the BIR by virtue of a Memorandum Order from the Office of
the President dated May 24, 1988.
o The entry of Commissioner Jose Ong in 1989 was the implementation of the
"Tax Administration Program", embodying the Bureau's mission to improve tax
collection and simplify tax administration. The Program contained several tax
reform and enhancement measures, which included the use of the Taxpayer
Identification Number (TIN) and the adoption of the New Payment Control
System and Simplified Net Income Taxation Scheme.
H. RAMOS ADMINISTRATION
o The year 1993 marked the entry of the first lady Commissioner in the Bureau,
Liwayway Vinzons-Chato. In order to attain the Bureau's vision of transformation,
a comprehensive and integrated program known as the ACTS or Action-
Centered Transformation Program was undertaken to realign and direct the
entire organization towards the fulfillment of its vision and mission.
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o In 1994, Chato implemented a five-year Tax Computerization Project (TCP) that
involved the establishment of a modern and computerized Integrated Tax
System and Internal Administration System.
o Further streamlining of the BIR was approved on July 1997 through the passage
of EO No.430, in order to support the implementation of the computerized
Integrated Tax System. Highlights of the said EO included the: 1) creation of a
fourth Revenue Group in the BIR, which is the Legal and Enforcement Group
(headed by a Deputy Commissioner); and 2) creation of the Internal Affairs
Service, Taxpayers Assistance Service, Information Planning and Quality Service
and the Revenue Data Centers.
I. ESTRADA ADMINISTRATION
o Beethoven Rualo, was appointed as Commissioner of Internal Revenue and
undertook priority reform measures to enhance voluntary compliance and improve
the Bureau's productivity. One of the most significant reform measures was the
implementation of the Economic Recovery Assistance Payment (ERAP)
Program, which granted immunity from audit and investigation to taxpayers who
have paid 20% more than the tax paid in 1997 for income tax, VAT and/or
percentage taxes.
o Encourage and educate consumers/taxpayers of demanding sales invoices and
receipts, which was institutionalized in 1999 through the raffle promo "Humingi ng
Resibo, Manalo ng Libo-Libo".
o The Large Taxpayers Monitoring System was also established under
Commissioner Rualo's administration to closely monitor the tax compliance of the
country's large taxpayers.
o The coming of the new millennium, Dakila Fonacier was appointed as the new
Commissioner of Internal Revenue. The most significant of these measures
include: full utilization of tax computerization in the Bureau's operations;
expansion of the use of electronic Documentary Stamp Tax metering
machine and establishment of tie-up with the national government agencies
and local government units for the prompt remittance of withholding taxes;
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and implementation of Compromise Settlement Program for taxpayers with
outstanding accounts receivable and disputed assessments with the BIR.
o In September 1, 2000, the Large Taxpayers Service (LTS) and the Excise
Taxpayers Service (ETS) were established under EO No. 175 to reinforce the tax
administration and enforcement capabilities of the BIR.
o The passage of the Electronic Commerce Act of 2000 on June 14, the Bureau
implemented a Full Integrated Tax System (ITS) Rollout Acceleration Program to
facilitate the full utilization of tax computerization in the Bureau's operations. Under
the Program, seven (7) ITS back-end systems were released in stages in RR 8 -
Makati City and the Large Taxpayers Service.
J. ARROYO ADMINISTRATION
o After the EDSA II in January 2001, newly-installed President Gloria Macapagal-
Arroyo appointed a former Deputy Commissioner, Atty. René G. Bañez, as the
new Commissioner of Internal Revenue.
o Baňez implemented of change initiatives that were directed to: 1) reform the tax
system to make it simpler and suit the Philippine culture; 2) reengineer the tax
processes to make them simpler, more efficient and transparent; 3) restructure the
BIR to give it financial and administrative flexibility; and 4) redesign the human
resource policies, systems and procedures to transform the workforce to be more
responsive to taxpayers' needs.
o Implementation of the Voluntary Assessment Program and Compromise
Settlement Program and expansion of coverage of the creditable withholding tax
system. A technology-based system that promotes the paperless filing of tax
returns and payment of taxes was also adopted through the Electronic Filing and
Payment System (eFPS).
o With the resignation of Commissioner Bañez on August 19, 2002, Finance
Undersecretary Cornelio C. Gison was designated as interim BIR
Commissioner. Eight days later (on August 27, 2002), former Customs
Commissioner, Guillermo L. Parayno, Jr. was appointed as the new
Commissioner of Internal Revenue (CIR).
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o Commissioner Parayno offered a Voluntary Assessment and Abatement
Program (VAAP) to taxpayers with under-declared sales/receipts/income and
adopted the use of new systems such as the Reconciliation of Listings for
Enforcement or RELIEF System to detect under-declarations of taxable income
by taxpayers and the electronic broadcasting system to enhance the security of
tax payments.
o Moreover, under Parayno, the BIR expanded its electronic services to include the
web-based TIN application and processing; electronic raffle of
invoices/receipts; provision of e-payment gateways; e-substituted filing of
tax returns and electronic submission of sales reports.
o The conduct of special operations on high profile tax evaders, which resulted to
the filing of tax cases under the Run After Tax Evaders (RATE) Program as well
as the conduct of Tax Compliance Verification Drives and accreditation and
registration of cash register machines and point-of-sale machines.
o October 28, 2006, Deputy Commissioner for Legal and Inspection Group, Jose
Mario C. Buñag was appointed as full-fledged Commissioner of Internal Revenue
and undertook the expansion of the RATE Program to the Regional Offices;
inclusion of new payment gateways, such as the Efficient Service Machines and
the G-Cash and SMART Money facilities; implementation of the Benchmarking
Method and installation of the Bureau’s e-Complaint System, a new e-Service that
allows taxpayers to log their complaints against erring revenuers through the BIR
website.
o The Nationwide Rollout of Computerized Systems (NRCS) was also undertaken
to extend the use of the Bureau’s Integrated Tax System across its non-
computerized Revenue District Offices.
o In 2007, the National Program Support for Tax Administration Reform (NPSTAR),
a program funded by various international development agencies, was launched
to improve the BIR efficiency in various areas of tax administration (i.e. taxpayer
compliance, tax enforcement and control, etc.).
o On June 29, 2007, replaced by Lilian B. Hefti, making her the second lady
Commissioner of the BIR. Information sharing between the BIR and the Local
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Government Units (LGUs) was also intensified through the LGU Revenue
Assurance System, which aims to uncover fraud and non-payment of taxes.
o To enhance the Bureau’s audit capabilities, the use of Computer-Assisted Audit
Tools and Techniques (CAATTs) was also introduced in the BIR under her term.
o October 2008, former BIR Deputy Commissioner for Legal and Enforcement
Group, Sixto S. Esquivias IV was appointed as the new Commissioner of Internal
Revenue which he launched the “Oplan Kandado” Program and a Taxpayer
Feedback Mechanism (through the eComplaint facility accessible via the BIR
Website) was also established.
o In 2009, the Bureau revived its “Handang Maglingkod” Project where the best
frontline offices were recognized for rendering effective taxpayer service.
o In November 2009, Joel L. Tan-Torres assumed the position of Commissioner of
Internal Revenue. He institutionalized several programs/projects to improve
revenue collections, and these include Project R.I.P (Rest in Peace); intensified
filing of tax evasion cases under the re-invigorated RATE Program; conduct of
Taxpayers Lifestyle Check and development of Industry Champions.
o Linkages with various agencies (i.e. LTO, SEC, BLGF, PHALTRA, etc.) were also
established through the signing of several Memoranda of Agreement to improve
specific areas of tax administration.
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Local Tax Code were later subsumed into the LGC of 1991.
1) The residence Tax and residence certificate were renamed into current community
tax and community tax certificate.
2) The problem with land tax was that land titling in the rural area was very disorderly,
the appraising of land value was influenced by political and familial factors.
3) Tax evasion was prevalent among elites.
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o Toll Fees or Charges
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(For example, Ben’s salary is P10,000 and the government is deducting 10% of
his salary for tax. After a year his income increases to P15,000 and the
government now deducts 12% in his salary for tax. Hence, the said tax is
proportional)
2) A Tax is Regressive. A regressive tax means that the government takes a larger
percentage of a person’s income tax, while he is receiving a lower income. (For
example, Ben’s salary is P10,000 and the government is asking him to pay 15%
of his salary for tax which is contrary to our given example in number 1)
3) A Tax is Progressive. A progressive tax means that the government takes a larger
percentage of his salary for tax due to his high salary. (For example, Ben has a
monthly income of P30,000 and the government deducted 20% of his salary for
tax. Here, the tax amount is proportionately equal to someone’s status in the
society. A rich man should pay more than a poor man)
SIGNIFICANCE OF TAXATION
o The primary purpose of taxation is to generate funds/revenues used to defray
expenses incurred by the government in promoting the general welfare of the
citizenry.
o In most nations, especially our country, taxes are the major source of government
income. Others come from borrowings, sale of public lands and other government
properties, and interests in investments. This manifest that taxes are the lifeblood
of a nation.
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CLASSIFICATION OF TAXES
1. As to subject matter
1.1. Personal, Poll, or Capitation Tax. This tax means that there is a fixed amount
upon all persons residing within specified territory without regard to their property
or the occupation in which they are may be engaged. Example: Residence Tax
(Cedula)
1.2. Property tax. This tax refers to one assessed on all property located within a
territory on a specified date in proportion to its value, or in accordance with some
other reasonable methods of apportionment, the obligation to pay which is
absolute and unavoidable and is not based upon any voluntary action of an
individual’s assessment. Example: Real estate tax
1.3. Excise Tax. This tax refers to any tax which does not fall within the classification
of a poll tax or a property tax and embraces every form of burden not laid directly
upon person property. Example: Value-added Tax
2. As to who bears the burden
2.1. Direct Tax. This tax refers to a tax which is demanded from an individual who
tends to buy or purchase a good or service. Example: Income Tax
2.2. Indirect Tax. This refers to the tax paid primarily by a person who can shift the
burden upon someone else, who is under no legal obligation to pay him/her.
Example: Buying of goods and services (VAT)
3. As to determination of account
3.1. Specific Tax. This tax is fixed or determinate sum imposed by the head or number
or some standard of weight or measurement, and requires no assessment beyond
a listing and classification of the object to be taxed. Example: Taxes on wine
3.2. Ad Valorem Tax. It is a tax of a fixed proportion of the value of the property with
respect to which the tax is assessed, and requires the intervention of assessors or
appraisers to estimate the value of such property before the amount due from each
tax payer can be determined. Ex. The value of Real estate tax
4. As to purpose
5.1. General Tax. It refers to the tax levied to an individual for a general public purpose.
Almost all taxes are an example of this classification.
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5.2. Specific Tax. This tax is levied to an individual for a particular or specific purpose.
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to the producer or manufacturer; this occurs when a producer of a taxed commodity
transfers the money burden of tax to the supplier of factors of production, who in turn
is paid a lower price for the factors of production. Ex. farmers are at time paid lower
prices for their produce when a tax is imposed on the processor of the produce.
2. Tax evasion - used by the taxpayer of illegal or fraudulent means to defeat or reduce
the payment of a tax. It is punishable by law; Tax evasion happens when there is fraud
through pretension and the use of other illegal devices to lessen one’s taxes, there is
tax evasion, under-declaration of income, and non-declaration of income and other
items subject to tax, Under-appraisal of goods subject to tariff, and over-declaration of
deductions: This is also known as “tax dodging.”
Note:
Tax Exemption is the grant of immunity or freedom from a financial charge, obligation, or
burden to which others are subjected.
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4. DONOR’S TAX
Donor’s tax is a tax on a donation or gift. It is also tax imposed on the gratuitous transfer
of property between two or more persons who are living at the time of transfer. It shall
apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and
whether the property is real or personal, tangible or intangible.
5. ESTATE TAX
Tax on the right of the deceased person to transmit his/her estate to lawful heirs and
beneficiaries at the time of death and on certain transfers which are made by law as
equivalent to testamentary disposition.
It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon
death of the owner. The estate tax is based on the laws in force at the time of death
notwithstanding postponement of the actual possession or enjoyment of the estate by the
beneficiary.
6. INCOME TAX
Tax on all annual profits made from property ownership, profession, trades or offices. It
is also a tax on a person’s income, emoluments (salary), profits, etc.
7. PERCENTAGE TAX
Business tax imposed on people or entities who sell or lease goods, properties, or
services in the course of trade or business whose gross annual sales or receipts do not
exceed the amount required to register as VAT-registered tax payers.
8. VALUE-ADDED TAX
Business tax imposed and collected from the seller in the course of trade or business on
every sale or properties, or vendors of services. This is an indirect tax, thus, it can be
passed on to the buyer, causing the increase of prices of most goods and services bought
and paid by customers.
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9. EXCISE TAX
Tax imposed on good manufactured or produced in the Philippines for domestic (local)
sale or consumption or any other disposition. It is also imposed on things that are imported
to the Philippines.
LOCAL TAXES
Taxes based on the local government taxation in the Philippines as stated in the
Republic Act 7160 or the Local Government Code of 1991, as amended. These are taxes,
fees, or charges are imposed by the local government units such as provinces, cities,
municipalities, and barangays.
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TYPES OF LOCAL TAXES
1. TAX ON TRANSFER OF REAL PROPERTY OWNERSHIP
Tax imposed on the sale, donation, barter, or on any other mode of transferring ownership
of real property.
3. FRANCHISE TAX
Tax on franchised businesses, at the rate not exceeding 50% of 1% of the gross annual
receipts of the preceding calendar year based on the incoming receipt (annual earning)
with the territorial jurisdiction where the franchise is selling in.
5. PROFESSIONAL TAX
Annual tax on each person engaged in the exercise or practice of his or her profession
that requires government examination, like licensure examinations.
6. AMUSEMENT TAX
Tax collected from the proprietors, lessees, or operators of theaters, cinemas, concert
halls, circuses, boxing stadia, and other places of amusement.
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7. ANNUAL FIXED TAX FOR EVERY DELIVERY TRUCK OR VAN OF
MANUFACTURERS OR PRODUCERS, WHOLESALERS OF, DEALERS, OR
RETAILERS IN, CERTAIN PRODUCTS
Annual fixed tax for every truck, car, or any vehicle used by manufacturers, producers,
wholesalers, dealers, or retailers in the delivery or distribution of distiller spirits, fermented
liquors, soft drinks, cigars and cigarette and any other products to sales, outlets, or
consumers, whether directly or indirectly, within the province. This type of tax is usually
imposed as determined by the local provincial councils through which the truck or trucks
pass through or deliver their cargo.
8. TAX ON BUSINESS
Imposed by cities or municipalities o businesses before they will be issued a business
license or permit to start operations based on the schedule of rates prescribed by the
local government code, as amended.
9. TAX ON BUSINESS
Businessmen pay this tax if they apply for a Mayor’s Permit to conduct their business in
the local government unit. Rates of these taxes vary among cities and municipalities.
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12. COMMUNITY TAX
Tax levied by cities or municipalities to every Filipino or alien living in the Philippines,
eighteen (18) years of age or over, who has been regularly employed on a wage or salary
basis for at least thirty (30) consecutive working days during any calendar year.
Community tax is also imposed on every corporation not matter how created or organized,
whether domestic or resident foreign, engaged in or doing business in the
Philippines.*Cedula
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o Those with taxable income below P250,000 will be exempt from paying PIT, while
the rest of taxpayers, except the richest, will see lower tax rates ranging from 15%
to 25% by 2020.
o The personal income tax system of TRAIN will exempt some 83% of current
taxpayers.
o Known as the Tax Reform for Acceleration and Inclusion (TRAIN) law, the tax
program overhauls the country's 20-year-old tax regime in a bid to make the tax
system fairer and simpler.
o Under the TRAIN, personal income tax rates will be adjusted to shift the burden off
lower-income segments toward the "ultra-rich. “
o Starting mid-January, the retail price of a one-liter bottle of Coca-Cola, for instance,
is projected to increase to P43 from the current P31, an increase of P12.
o This is because of the P12-per-liter tax on drinks using high fructose corn syrup.
For drinks using sugar and artificial sweeteners, a P6-per-liter tax has been
imposed. However, all kinds of milk, 3-in-1 coffee, natural fruit juices, vegetable
juices, and medically indicated beverages are exempt.
o Expanding the Value-Added Tax (VAT) base
o The Philippines has one of the highest VAT rates but also the highest number of
exemptions in the Southeast Asia region.
o These tax exemptions have created much confusion, complexity, and discretion in
our tax system resulting in leakages and opening doors for negotiation, corruption,
and tax evasion.
o TRAIN aims to clean up the VAT system to make it fairer and simpler and lower
the cost of compliance for both the taxpayers and tax administrators.
o The TRAIN will direct the way to protect the poor and vulnerable compared to the
tax exemptions and blind subsidies that are inefficient and largely beneficial to the
rich since they have higher purchasing power.
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USING/APPLYING KNOWLEDGE (application/integration)
1. Regular payment of taxes is the biggest help that citizen can give to the government.
Make a cartoon or slogan to convince people to pay their taxes honestly and
promptly. Do this in a sheet of bond paper.
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