TAXATION

What is taxation?
Taxation refers to compulsory or coercive money collection by levying authority, usually a government.
The term “taxation” applies to all types of involuntary levies, from income to capital gains to estate taxes.
Taxation is a means by which government finance their expenditure by imposing charges on citizen and
corporate entities. In simple words, it refers to the practice where the government collect money from its
citizens to pay for public services such as public parks, libraries, bridges, schools, government buildings, etc.
What are taxes?
Taxes are mandatory contributions of everyone to raise revenue for nation-building. The revenue is used
to pay for our doctors, teachers, soldiers, government personnel and officials, as well as for building public
infrastructure like schools, hospitals, roads, and more.
Legal Bases of Philippine Taxation
1. Constitution
Article VI, section 28 of the Constitution states that “the rule of taxation shall be uniform and
equitable” and that “Congress shall evolve a progressive system of taxation”.
2. National Law
a. National Internal Revenue Code – enacted as Republic Act No. 8424 or the Tax Reform Act of
1997.
b. Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act of 2017.
c. Republic Act No. 7160 or the Local Government Code of 1991, and those sourced from proceeds
collected by virtue of a local ordinance.
Note: Taxes imposed by the national level are collected by the Bureau of Internal Revenue (BIR), while
those at the local level are collected by a local treasurer’s office.
The Powers and Duties of the Bureau of Internal Revenue (BIR):
I.