THE EVOLUTION OF TAXATION

WHAT IS TAXATION?

- Taxation is the process or means by which the sovereign (independent state), through its law-
making body( the legislature), imposes burdens upon subjects and objects within its jurisdiction for
the purpose of raising revenues to carry out the legitimate objects of the government.
SCRIPT: Taxation is the process or means by which the sovereign (independent state), through its
law making body (the legislature), imposes burdens upon subjects and objects within jurisdiction for
the purpose of raising revenues to carry out legitimate objects to the government. In simple terms,
it is the act of levying a tax to apportion the cost of government among those who, in some
measure, are privileged to enjoy its benefits and must therefore bear its burdens

- Taxation is the act of levying (imposing or pagpataw) a tax to apportion the cost of the government
among those who, in some measure, are privileged to enjoy its benefits and must therefore bear its
burdens.
-
- Its is a power inherent (natural or likas na kapangyarihan) in every sovereign state, being essential
to the existence of every government. Without this power, no sovereign state can exist or endure.
Hence, even if not mentioned in the constitution, the state can still exercise this power.
a. The power to tax is one of the three (3) inherent powers of the state: police power, power of
taxation and power of eminent domain.

PURPOSE OF TAXATION

- Primary: Revenue or Fiscal Purpose

To provide funds or property with which to promote the general welfare and protection of its
citizen and to enable it to finance its activities (refers to the 1 st definition of taxation)
Ex: income and business taxes
Pangunahin: Kita o Layunin sa Pananalapi
Upang magkaloob ng mga pondo o ari-arian kung saan isusulong ang pangkalahatang kapakanan at
proteksyon ng mamamayan nito at upang matugunan nito ang mga aktibidad nito (tumutukoy sa
unang kahulugan ng pagbubuwis)
Hal: mga buwis sa kita at negosyo
- Secondary: Regulatory Purpose (or Sumptuary/ compensatory)
“A device for regulation or control” (implementation of police power) by means of which certain
effects or conditions envisioned by the government are met such as:
a. Promotion of general welfare
b. Reduction of social inequality
c. Economic growth
Ex: (imposed for regulation): excise taxes for cigarettes and alcohol, amusement taxes for night
and day clubs, cockpits and racetracks,

Pangalawa: Layunin ng Regulatoryo (o Sumptuary/ compensatory)

"Isang aparato para sa regulasyon o kontrol" (pagpapatupad ng kapangyarihan ng pulisya) kung saan
natutugunan ang ilang mga epekto o kundisyon na nakikita ng pamahalaan tulad ng:
a. Pagsusulong ng pangkalahatang kapakanan

b. Pagbawas ng hindi pagkakapantay-pantay sa lipunan

c. Pang-ekonomiyang pag-unlad

Hal: (ipinataw para sa regulasyon): mga excise tax para sa mga sigarilyo at alak, mga buwis sa paglilibang
para sa mga night at day club, mga sabungan at mga karerahan,

TAXATION IN SPANISH PHILIPPINES

PRE- COLONIZATION

During the time before Spaniards came, the country had various kingdoms, called barangays, which was
ruled by the datus or rahas in some areas who offered protection to all its people. Since barter was the
leading form of trade back then, the handug came in form of crops and goods, which the people living
under the datu share a portion of their harvest or property, in exchange for security and protection is
resembled taxation

Noong unang panahon bago pa man dumating ang mga banyagang mananakop an gating bansa ay
mayroon nang paghahandog ng mga naaning gulay o prutas o mga namiminang ginto o bulawas ang
ating mga ninuno na kanilang binibigay sa kanilang datu o raja upang sila ay proteksyonan at ang
paghahandog na ito ay maihahalintulad sa taxation o pagbubuwis.

SPANISH COLONIZATION

During the Colonization, Spaniards gradually changed this subsistence system and imposed payment
from the Filipinos similar of what they’ve been practicing for a long time.

During the colonization, Spaniards gradually change this subsistence system and imposed a payment
from the Filipinos that is similar of what they’ve been doing for a long time ago. The main purpose of it is
to generate resources for the government and in able to provide salary for the officials, maintenance of
the islands or the expenses of the clergy. Other than that the hindrance which being faced by the
Spaniards is the collecting of the revenue which solved by introducing the system of reduccion by
creating pueblos, where Filipino gathered and awarded plots of lands to till. And its headed by an
encomenderos who receives awards from the Spanish crown. And there are people too who were
exempted from paying and there are the principales.

Taxes Imposed by the Spanish Government

Tributos/ tribute – was a general tax paid by the Filipinos to Spain which amounted to (8) eight reales.

Those who were required to pay the tribute are the:

- 18 to 50 years old males

- The carpenters, bricklayers, blacksmiths, tailors and shoemakers
- The town workers such as those in road construction, and those whose is public in nature
Sanctorum- was a tax in the amount of 3 reales. These were required for the cost of Christianization,
including the construction of the churches and the purchase of materials for religious celebrations.

Donativo- was a tax in the amount of half real for the military campaign of the government against the
Muslims. In the later years, the amount collected from the Donativo was almost exclusively used for the
Spanish Fort in Zamboanga.

Caja de Comunidad- was a tax collected in the amount of one real for the incurred expenses of the town
in the construction of the roads, repair of bridges, or the improvement of the public buildings.

Servicio Personal or Polo Y Servicio- is the system of forced labor which evolved within the framework
of the encomienda system, introduced into the South American colonies by the Conquistadores and
Catholic priests who accompanied them.

REVOLTS AGAINST THE TRIBUTE

Cagayan and Dingras Revolts- the Cagayan and Dingras Revolts against the tribute occurred on Luzon in
the present day provinces of Cagayan and Ilocos Norte in 1589. Ilocanos, Ibanags and other Filipinos
revolted against alleged abuses by the tax collectors, including the collection of high taxes. It began
when six tax collectors who had arrived from Vigan were killed by the natives. Governor-General
Santiago de Vera sent Spanish and Filipino colonial troops to pacify the rebels. The rebels were
eventually pardoned and the Philippine tax system reformed.

Sumuroy’s Revolts- in the town of Palapag today in Northern Samar, Agustin Sumuroy, a Waray, and
some of his followers rose in arms on June 1, 1649 over the polo y servicio or forced labor system being
undertaken in Samar. This is known as the Sumuroy Revolt, named after Agustin Sumuroy.

- The local parish priest of Palapag was murdered and the revolt eventually spread to Mindanao,
Bicol and the rest of the Visayas, especially in places such as Cebu, Masbate, Camiguin, Zamboanga,
Albay, Camarines and parts of northern Mindanao, such as Surigao. A rebel government was
successfully established in the mountains of Samar.
- The defeat, capture and execution of Sumuroy in June 1650 delivered a big setback to the revolt.
His trusted co conspirator David Dula sustained the quest for freedom with greater vigor but in one
of a fierce battles several years later, he was wounded, captured and later executed in Palapag,
Northern Samar by the Spaniards together with his seven key lieutenants.

Maniago’s Revolts- the Maniago Revolt was an uprising in Pampanga during the 1660s named after its
leader, Francisco Maniago. During that time, Pampanga drew most of the attention from the Spanish
religious orders because of its relative wealth. They also bore the burden of more tribute, forced labor,
and rice exploitation. They were made to work for eight months under unfair conditions and were not
paid for their labor and for the rice purchased from them. Their patience was put to the limit and they
signified their intention to revolt by setting their campsite on fire. The fight soon began and because the
Spaniards were busy fighting against the Dutch, they were badly depleted by the Kapampangans. The
Maniago revolt was the start of a much bigger and even bloodier revolt in Pangasinan. This battle was
led by a man named Andres Malong who had heeded the call of Maniago to revolt against the
Spaniards.
-

- Malong's Revolt- Andres Malong was the maestro de campo of Binalatongan, now San Carlos City,
Pangasinan in the 1660s. He assisted many Spaniards in governing different towns in Pangasinan,
and as such, had learned and was trained to use force and cruelty. He hoped of being the King of
the province, however, set this plan aside when a war, led by Francisco Maniago, broke out in
Pampanga. Malong started his campaign in a small barangay called Malunguey, but failed. Having
the same condition as in Pampanga, he led the people in Pangasinan to take up arms against the
Spaniards. It spread like wild fire in Pangasinan. Because of his success, he proclaimed himself King
of Pangasinan.

THE TAX REFORMS OF 1884

One of the good reforms which Spain introduced in the 19th century was the Tax Reform o 1884, as
provided by the Royal Decree on March 6, 1884, this tax reform contained two important provisions.

1. Abolition of the hated Tribute and its replacement of Cedula Tax and;

2. Reduction of the 40-day annual forced labor (polo) to 15 days.

Cedula Personales

Cedulas were first issued based on the Royal Decree on March 6, 1884. All men and women residents of
the island- Spaniards, foreigners, and natives- who were over 18 years old were required to obtain a
cedula. The only exceptions were the Chinese, who paid another poll tax, the remontados d infieles,that
were not subject to local administration, and the natives and colonist of the archipelago of Jolo and of
the islands of Balabac and Palawan.

All in all, there were 16 different classes of cedulas. Originally, there were 9 classes taxed, the rates of
Taxes ranged from 1.50 to 25 Pesos, and a tenth, grantis, for priest, soldiers and privileged classes.

TAXATION UNDER THE AMERICANS

Taxation under Americans are self-sufficient by running the government with the smallest possible sum
of revenue and created surplus in the budget

1898 to 1903-

 The Americans followed the Spanish System of Taxation with some modifications.
 The military government suspended the contracts of opium, lottery, and charges for coinage of
money.
 Urbana- tax on the annual rental value of an urban real state.
 Land Tax- the payable annually by virtue of ownership of a land.

1904- The Internal Revenue Law of 1904

The Internal Revenue Law of 1904 was passed as a reaction to the collecting land tax. It prescribed nine
major sources of revenue.

It prescribe ten major sources of revenue:

1. Licensed taxes on firms dealing in alcohol beverages and tobacco.

2. Excise taxes on alcohol beverages and tobacco products
3. Taxes on books and bankers
4. Document stamp taxes
5. The cedula
6. Taxes on insurance and insurance companies
7. Taxes on forest products
8. Mining concessions
9. Taxes on business and manufacturing
10. Occupational licenses

In 1907 some provinces were authorized to double the fee for the cedula to support the construction
and maintenance of roads.

Industria- was levied on the business community and become a highly complex system that assigned a
certain tax to an industrial or commercial activity according to their profitability.

In 1913, the Underwood- Simons Tariff Act was passes, resulting in a reduction in the revenue of the
government as export taxes levied on sugar, tobacco, hemp and copra were lifted

New sources of taxes were introduced later on. In 1914, an income tax was introduced; in 1919, an
inheritance tax was created; and in 1932 a national lottery was established to create more revenue for
the government.

References

Uday et al. (2020). Taxation under the Americans and Taxation during the Commonwealth Period.
Retrieved from https://www.youtube.com/watch?v=5ZyJPHhaITM.

Serrano, A. (2021). Fundamental Principles of Taxation. Retrieved from

https://www.youtube.com/watch?v=_tiRbg6tLEg.

Ana Luisa. (2019). Taxation during the Spanish Period. Retrieved from
https://www.scribd.com/presentation/398789377/HISTO-Report-11-14.

Malit, T. (2018). Taxation during the Spanish Period. Retrieved from

https://prezi.com/p/c_qyy4o9mc35/taxation-during-the-spanish-period/.

Jayson, R. (2019). Philippine Taxation under the American Period. Retrieved from
https://www.scribd.com/document/411493309/Philippine-Taxation-Under-American-Period.
Commission on Higher Education (CHED).
https://phlconnect.ched.gov.ph/admin/uploads/da4902cb0bc38210839714ebdcf0efc3/04-Handout-
2_2.pdf.