Jorge Gian G.

Salandanan

1 - BSBA Marketing Management

Taxes which increase government revenue are divided into two categories. Namely the first
category is called National Taxes. In summary, National taxes are mandatory contributions
imposed by the government and collected through the Bureau of Internal Revenue (BIR). These
taxes and fees are collected and garnered by local government units in each province, city, town,
and barangays. These local government units are given the power and responsibility to levy such
taxes by code (Mo 2020). These taxes are essentially used by the government to invest in
technology and education.

The following taxes are classified under National Taxes (According to the BIR website).

1. Estate Tax: Excise tax is a tax on the deceased's right to transfer their assets to their legitimate
heirs and beneficiaries at the time of death, as well as certain transfers that are legally
equivalent to wills. It is not a wealth tax given that it is like an inheritance tax. Likewise, it is
a tax levied on the privilege of transferring property upon the death of the owner. Furthermore,
it is based on the laws in effect at the time of death, regardless of whether the beneficiary
actually owns or uses the estate.
2. Documentary Stamp Tax: Technically speaking, it is a tax on documents, instruments, loan
contracts and papers that prove the acceptance, assignment, sale or transfer of an obligation,
right or property related to them.
3. Percentage Tax: Percentage tax is a business tax levied on any person, entity, or transaction
listed in Sections 116 to 127 of the National Internal Revenue Code of 1997 (also known as
the Tax Code), as amended and required by special laws.
4. Capital Gains Tax: To summarize, Capital Gains Tax is a tax levied on the gains that the
seller believes to have obtained from the sale, exchange or other disposition of any investment
located in the Philippines, including retro-contract sales and other forms of conditional sales.
5. Income Tax: Income tax is a tax on income, remuneration, the benefit of a person from the
patrimony, professional practice, commercial or business activity or on the corresponding
gross income, which in the tax code of 1997 (tax code) in the current version stipulated they
are, less the deductions that are allowed for said income according to the tax code in the
 currently applicable version or other special laws. Therefore, income tax is a type of tax that
governments impose on income generated by businesses and individuals within their
jurisdiction.
6. Value-added Tax: Value added tax (VAT) is a form of sales tax. It is a consumption tax that
is applied to the sale, barter, exchange or lease of goods or real estate and services in the
Philippines and to the importation of goods into the Philippines. In short, is a type of tax that
is assessed incrementally. In the Philippines, the tax is equivalent to a uniform rate of 12%,
based on the gross selling price of goods or properties sold, or gross receipts from the sale of
services.
7. Excise Tax: The excise tax is a tax on the production, sale or consumption of a commodity in
a country. In addition, these are taxes levied on various goods, services and activities. These
taxes can be collected by the manufacturer, distributor or consumer according to the specific
tax. In particular, excise duties are taxes on certain goods or services such as fuel, tobacco, and
alcohol.
8. Donor’s Tax: In summary, donor’s tax is a tax on a donation or gift and applies to the free
transfer of property between two or more people living at the time of the transfer.

The next category is called local taxes, which are based on the Republic Act 7160, also known as
the 1991 Local Government Code. These taxes and fees, on the other hand, are collected by local
government units in provinces, barangays, cities and municipalities. (Mo 2020).

The following taxes are classified under Local Taxes (According to the BIR website).

1. Franchise Tax: It refers to the tax that is applied to franchised companies at a maximum
of 50% of 1% of the annual gross income of the previous year.
2. Basic Real Property Tax: The basic coverage of the real property tax covers six types of
real estate: agricultural, commercial, industrial, mineral, residential and forestry properties.
3. Sand, Gravel and other Quarry Resources Tax: These are taxes imposed on per cubic
meter of quarry resources (such as gravel, sand, common stone, earth, and sand extracted
from public lands or bodies of water), LGUs collect a maximum of 10% of the site's market
value.
 4. Business of Printing and Publication Tax: These taxes are also collected on the
publication or printing of books, posters, brochures, maps, canvases, and other printed
materials.
5. Annual Fixed Tax for Delivery Trucks and Vans: Local government units collect P500
each year from delivery vehicles such as trucks and vans that transport products (beverages,
groceries, cosmetics, tobacco, etc.).
6. Professional Tax: This type of tax applies to people whose professions require
government scrutiny, such as: B. an examination before a committee or an admission.
These professionals include lawyers, doctors, engineers, architects, and others subject to
this tax.
7. Amusement Tax: Films, theatrical plays, concerts and all forms of entertainment shows
are subjected to tax. It is commonly added to the admission price or the entrance tickets.
8. Community Tax: The community tax is a tax for the general public, for which an amount
must be paid depending on the class of income. The base rate is P5 and there is an additional
increase of P1 for each income of P1,000.
9. Barangay Tax: Micro, small and medium enterprises, such as retailers and “sari-sari
stores,” which have gross sales of 50,000 pesos each year, must pay the barangay tax. The
tax begins to accrue from the first day of the first month of each year.

REFERENCES:

Mo, B. (2020). Types of Taxes in the Philippines. Retrieved From:

https://www.ecomparemo.com/info/types-of-taxes-philippines

BIR. (2021). Tax Information. Retrieved From: https://www.bir.gov.ph/index.php/tax-

information.html

Fay, B. (2021). Types of Taxes. Retrieved From: https://www.debt.org/tax/type/