MODULE 4

Social, Political, Economic, and Cultural Issues in Philippine History

In this module, the student is expected to know and understand the patterns of social
struggle and political inferences that shapes the past and present Philippine societal landscape
through agrarian reform, Philippine Constitution, and tax measures.

INTENDED LEARNING OUTCOME

By the end of this module, the student will be able to:

1. Identify salient points in agrarian reform, constitution, and tax laws

2. Recognize the importance of farmers in the Philippine economy

3. Cite provisions in the Philippine Constitution relevant to their rights as persons

4. Defend farmers, human rights, and territorial integrity through legal parameters

Lesson 3

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 TAX AND TAX HISTORY

Answer the following in not more than 4 sentences:

1. Why do we need to pay taxes?

2. Is tax a burden? Why?

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 Let’s Read!

NATURE OF TAXATION

Tax is the lifeblood of the government. With many people seeing it as burden than a
contribution, it is one inherent power of the government to wit:

* No constitutional government can exist without it;

* It is one great power upon which the whole national fabric is based;
* It is necessary for the existence and prosperity of the nation; and
* It is the lifeblood of the nation. (Albano:2020)

Taxation, according to Thomas Cooley, is the power inherent in socereignty to raise

revenue to defray the necessary expenses of government, that is, for any public purpose. It is
considered for public purpose if the proceeds thereof are used for the support of the
government, or for some organized object of government, or for the welfare of the community.
( Beach vs. Branch Sheet, 82 Atl. 1030)

TYPES OF TAXES IN THE PHILIPPINES:

National Taxes
National taxes are taxes inherent and collected by the central/ national government.
These taxes include income, indirect (value-added and percentage taxes), excise and
documentary stamp taxes.

Local Taxes
Local taxes are taxes collected by the local government units as a matter of autonomy
and provided for by the Local Government Code. These taxes include ownership of business
and real property taxes.
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 HISTORY OF TAXATION IN THE PHILIPPINES:

During the pre-Hispanic Philippines, the archipelago is made up of political units known
as barangay. Each barangay is being led by a datu or rajah and the people are paying tributo
to him for protection. Tributo is also known as buwis or handug. This tributo will soon be
replicated by the Spanish government to the natives from 8-15 reales.

Upon the arrival and conquest of the Spaniards, they imposed burdensome taxes that
prevented Filipinos to be economically stable. The Spanish government collected both public
and ecclessiatic taxes. Even before the colonization, the Roman Catholic Church through
Pope Alexander VI's Bull on December 16, 1501, granted King Ferdinand and Queen Isabella
and their successors the right to collect or retain tithes and other church dues in their overseas
territories. In return, the Spanish government should pay for the expenses of the Roman
Catholic Church in Christianizing the conquered people. This set-up paved way for bloated tax
impositions to the native of the islands.

Under the Spanish rule, there are six (6) headings of taxes as follows:

1. Direct Taxes (contribuciones directas)

2. Indirect Taxes (contribuciones indirectas)
3. Monopolies (rentas estancadas)
4. Lottery
5. Public domains (bienes del estado)
6. Miscellaneous & indeterminate revenues (ingresos eventuales)

When Miguel Lopez de Legaspi conquered Manila, he reinstituted tributo payment as a

recognition of vassalage. The rate, known as "one tribute," was originally 8 silver reales for
each family, but this was early raised to 10 reales fuertes, or their equivalent, 25 reales del
vellon, equal to 1/4 pesos, and subsequently (I851) to 12 reales fuertes, or 1 1/2 pesos.

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 There are exemptions in the payment of tributo as follows like the alcaldes,
gobernadores and cabeza de barangay and their families, military servicemen, civil guards,
tobacco inspectors and storekeepers, government employees with fixed salary, and paupers
and crippled.

Every second year a padron de tasas, or tax list, was made up for each cabecer'a and
served as a basis of assessment for two years. This list was practically a census of the tribute-
paying natives, as it gave the names, ages and occupations of the heads of families subject to
the tribute. It had to be vised by the parish priest, who was supposed to compare it with the
parish records and vouch for its correctness.

A sanctorum is also being collected by the church amounting to 5 reales that served as
community fund.

In 1635, donativo de Zamboanga was collected to fund Jolo conquest. Vinta was also
collected in Bulacan 1781 for moro raids.

Cedulas personal was collected since 1884 and recognized as the time-honored tribute.
It is being paid together with a certificate of identification to all residents of the islands. Chinese
were exempted from this since they are paying remontodos e infieles.

The purposes of the the cedula were as follows:

1. public and private employment

2. passage to every municipality or province
3. contract
4. claims and business
5. legal and judicial services
6. matriculation to education
7. payment of direct taxes

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 8. acquisition of rights
9. bank transactions
10. establishment of identity
11. travel
12. domestic work

Income taxes were also paid under two categories: one is the urban real estate known
as contribucion directa sobre la propriedad urbana; and the industrial tax known as
contribucion directa sobre la industria el comercio, las profesionales y las artes. Bandala was
being collected annually in kind from the percentage of crops.

Polo y servicios or public work service is a mechanism of forced labor by able bodied
men 16-60 years of age to render public works and in shipyards for 40 days. To be exempted,
one must pay an exemption tax called falla equivalent to 1 1/2 reales per day.

Many taxes where imposed by ths Spanish government. The most notable was the
cedula that became the symbol of slavery and were torn during the declaration of Andres
Bonifacio's separation from Spain.

When the American occupation came, there were several tax reforms. Direct taxes were
continued to be collected. The Bureau of Internal Revenue was created in 1904 under the
Reorganization Act 1189 that became the central collecting agency of the Philippines until the
present. It replaced the Contador de Resultas during the Spanish occupation. The said law
also made the following taxable:

* excise tax on liquors and tobacco

* bank and banking institutions
* dividends

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 In 1907, cedula payment was reinstituted limited to adult males but was abolished in
1937. It was replaced by Residence Tax in 1940. Payment of residence tax and direct taxes
became the basis for the practice of suffrage rights.

Upon the grant of autonomy to the Philippines by virtue of Tydings McDuffie Law and
the enactment of the 1935 Constitution establishing the Commonwealth of the Philippines,
Pres. Manuel Quezon in his message to the Second National Assembly On Revision and
Codification of Tax Laws on March 7, 1939, he insisted his social justice program and
proclaimed that:

"In the Philippines, agriculture has made material progress; commerce and industry
have been given impetus; the wealth and income of the nation have materially increased and
their distribution has been altered; and a new political structure has been erected to meet our
forthcoming responsibilities as a sovereign state. But our tax machinery has remained
unchanged. It is out of line with modern economic concepts; it is not responsive to the
expanding fiscal requirements of the Government; it fails to distribute the tax burden in
proportion to the ability and resources of the different economic classes of the people; and its
administrative features are not abreast with the standards set by progressive nations.

Moreover, the present system of taxation is a source of a grave injustice. A cursory

examination of our tax laws shows that a majority of the existing internal revenue taxes are
paid by the consumer; hence, they weigh heavily upon the masses of the people and too lightly
upon those better able to pay them. The measure recommended by the Tax Commission will
remove this inequality."

But, with the outbreak of World War II and the Japanese sojourn, reforms were
interrupted. The BIR was merged to Office of Customs and tax laws during the American
period were carried out by President Jose P. Laurel from 1943-1945.

During the liberation and Third Republic tax laws were still based on the American
period. The most significant was a review during Pres. Ramon Magsaysay on the tax system
of the Philippines by passing the Republic Act 2211 in 1959 that created an executive-
legislative tax commission.

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 Another move that expanded the coverage of taxable goods is the introduction of the
Value Added Tax to commodities on January 1, 1988 under Pres. Corazon Aquino under
Executive Order 273 which was soon increased by Pres. Gloria Macapagal Arroyo from 10%
to 12% in 2005. Pres. Fidel V. Ramos expanded its coverage in 1994 through Republic Act
7716.

President Benigno Aquino III focused on the increase of coverage of taxes levied on
liquor and cigarettes known as Sin Tax.

President Rodrigo Duterte introduced and passed the TRAIN Law or the Tax Reform
Acceleration for Inclusion or Republic Act 10963 that minimized income taxes as its flagship.

What I can Do

Answer the following in not more than 5 sentences:

1. What projects of the government do you think are beneficial to you as an individual?

2. Why do you think the government still secures loans and enters to built-operate-
transfer scheme for its projects and programs.

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 Let’s try
this!

Answer the following:

_______ 1. It is the lifeblood of the government.

_______ 2. The president who increased the VAT from 10% to 12%
_______ 3. It became the symbol of bondage and revolution.
_______ 4. The collecting agency of the government.
_______ 5. It is an inherent power of the state to collect revenues

Assessment

Answer the online quiz that will be sent in the LMS.

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Resources

Albano, Ed Vincent III, POLITICAL LAW. Rex Publishing, 2020

Cortes, Rosario et al. FILIPINO SAGA: HISTORY AS SOCIAL CHANGE. New Day Publishing.
2000
Pobre, Cesar. PHILIPPINE LEGISLATURE: 100 YEARS. Philippine Historical Association.
2000
Collector of Internal Revenue vs. Campos Rueda, 42 SCRA 23
Plehn, Carl. TAXATION IN THE PHILIPPINES. Political Science Daily. Vol 16 No. 4 December
1901 Retrieved from: https://www.jstor.org/stable/2140422
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Manuel Quezon in his message to the Second National Assembly On Revision and
Codification of Tax Laws on March 7, 1939 Retrieved from:
https://www.officialgazette.gov.ph/1939/03/07/message-of-president-quezon-on-revision-and-
codification-of-tax-laws/

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