RPH Taxation

PHILIPPINE COLLEGE OF SCIENCE AND TECHNOLOGY
Old Nalsian Road, Nalsian, Calasiao, Pangasinan, Philippines 2418

Tel. No. (075)522-8032/Fax No. (075)523-0894/Website: www.philcst.edu.ph
ISO 9001:2015 CERTIFIED, Member: Philippine Association of Colleges and Universities (PACU), Philippine
Association of Maritime Institutions (PAMI)
TAXATION
(In the Philippine History)
Mondares, Barbie N.
Belmonte, Stephanie Ann S.
Siapno. Hanna Mae V.
Poyaoan, Jasmine T.
Aboy, Michael James I.
Anuran, James Gilbert D.
Bustarde, Daniel B.
Calugay, Aeron Gingerly
Castro, Ryleejeron B.
Junio, Jade Leir
BSCE 2 – BLK 1
Taxation in the Philippines has a long history that includes pre-colonial, Spanish,
American, Japanese, and post-war era. Prior to European colonization, indigenous
communities collected taxes based on local resources. During the Spanish administration,
tribute and bandala systems were implemented, which were frequently marred by
exploitation. The American colonial era saw the introduction of contemporary tax
arrangements, such as income and property taxes. During World War II, Japanese control
temporarily changed the tax environment. Following independence, the Philippines
proceeded to improve its tax system through numerous changes and modifications. Recent
legislation, such as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, reflects
continued attempts to align taxes with the country's changing economic and fiscal demands.
Taxation is a fundamental economic and fiscal concept in which governments collect
income from individuals, corporations, and other organizations in order to support
government services and operations. Income taxes, sales taxes, property taxes, and
corporation taxes are all examples of taxes. Tax money is used to fund important services like
healthcare, education, infrastructure development, and national security. Tax policies differ
from nation to nation and can have an impact on economic activity, income distribution, and
social welfare. Effective taxation systems achieve a balance between collecting cash for
government activities and minimizing the burden on taxpayers, with the goal of achieving
economic stability and equitable resource distribution.
Philippine Taxation and the History of the Bureau of Internal Revenue
I. Pre-colonial Era
Before Spanish colonization in the 16th century, indigenous communities in the
Philippines had their own systems of taxation, usually based on agricultural
production and local resources. These taxes supported tribal leaders and community
needs. Since barter was the leading form of trade back then, tax (called buwis or
handug, with the variant handog) came in forms of crops or goods, which the people
living under the datu share a portion of their harvest or property, in exchange for
security and protection.
Only the timawa (free men) pay taxes, since the maharlikas (nobility) and the
datu offer the protection, while the oripun or uripon (slaves) couldn't offer anything
since they lived to serve; thus the highest and the lowest of the castes were exempted
from tax payment.
II. Spanish Era
Taxes Imposed by the Spanish Government of the Philippines
• Taxation during spanish era was COMPULSORY.
• All Spanish colonies in America and the Philippine were required to pay taxes for
Two Reason.
1. recognition of Spain’s sovereignty over the colonies.
2. to defray the expenses of pacification and governance.
Taxes During Spanish Era in the Philippines were:

• TRIBUTE
• SANCTORUM
• DONATIVO
• CAJA DE COMMUNIDAD
• SERVICIO PERSONAL
TAXES:
1.) TRIBUTO (TRIBUTE)
- General tax paid by the Filipino to spanish which amounted to 8 Reales.
- The 18-50 years old males, and the carpenters, bricklayers, mga panday, mga
mananahi at mga taga-sapatos, and town workers such as those in road construction
and people who are public in nature are required to pay the tribute.
2.) SANCTORUM
- tax in the amount of 3 Reales.
- Required for the cost of Christianization including the construction of churches and
the purchase of materials for religious celebrations.
3.) DONATIVO
- Tax in the amount og half real for the Military campaign of government against the
Muslims.
- Amount collected was then exclusively used for Spanish Fort in Zamboanga.
4.) CAJA DE COMMUNIDAD

- Tax collected of 1 Real.
- For the incurred expenses of the town in construction of roads, Repair of bridges or
improving the public buildings.
5.) SERVICIO PERSONAL ( Polo y Servicio )

- Forced labor during the Spanish period.
- 16 – 60 years old able bodied males were required to work in construction of
bridges, Churches and galleon ship. And they were called polista
III. American Era

American military govornors ruled over the nation under the early american
dictatorship, which lasted from 1898 to 1901. Under William H. Taft, the first civil
government was founded in 1902. The Burue of Internal Revenue (BIR) was
established. However, during the second civil governor Luke E. Wright
administration by the signing of Reorganization Act No. 11989 on July 2, 1904. John
S. Hord was appointed as first collectot on August 1, 1904. When the BIR was legally
establish and put into operation under the dirction of Henry Ide, A collector, Vice
collector, One chief clerk, One law clerk, One records clerk, and three division chief
made up the first oraganization’s initial staff of sixty nine people.
Three (3) further American collectors:
- Ellis Cromwell (1909-1922)

- William T. Holting (1912-1924)
- James J. Rafferty (1914-1918)
Took over after John S. Hord. The Philippine commission and the US President both
approved their appointment by the governor general.
The Burue under collectot Holting under went its first reform on January 1, 1913 with
the establishing of eight department including:
1. Accounting
2. Cash
3. Clerical
4. Inspection
5. Law
6. Real Estate
7. License
8. Record
Collection by the real estate and license division were confined to revenue accuring to
the total city of Manila.
The Real Estate. License and cash divison were abolished on May 1, 1921, under the
authority of Act No. 299 and their responsibilities were given to the city of Manila,
with this transfer, the Burue was reduce to five (5) division including:
1. Administrative
2. Law
3. Accounting
4. Income tax
5. Inspection
Thereafter, the Burue establish the following:
1. The income tax examiners section was eventually combined with the examiner’s
division to establish the income tax division
2. The Secret Servuce Section, which oversaw the action of detection and surveillance
but eventually disbanded on 1951 January 1
- The struicture of Burue remained the same from 1921 to 1941, with the exeption of
the few minor adjustment and the establishment of the micellenous tax division in
1939.
- The Provincial Inspection districts were recognized in 1937 the secretary of finance,
who also maintained an internal Revenue office in each province under the director of
a provincial agent.
IV. Japanese Era

The historical relationship between Japan and the Philippines is quite extensive
and multifaceted. Over the centuries, there have been various interactions, trade, and
cultural exchanges between the two nations.
At the outbreak of World War II, under the Japanese regime (1942-1945), the Bureau
was combined with the Customs Office and was headed by a Director of Customs and
Internal Revenue.
V. Post-War Era
VI. Marcos Administration
VII. Cory Aquino Administration
VIII. Ramos Administration

The Presidency of Fidel V. Ramos also know Ramos Administration was the
th
12 President of the Philippines from 1992 to 1998. Under his leadership the
Philippines experienced a period of political stability and rapid economic growth and
expansion.
President Fidel Valdez Ramos was born March 18, 1928 to July 31, 2022 and it
was served as Secretary of National Defence (1988-1991) and Chief of Staff of the
Armed Forces of the Philippines (1986-1988) with the rank of General and he was
educated at the U.S. Military Academy at West Point, New York, and at the
University of Illinois.
In the year of Ramos Administration
Liwayway Vinzonz-Chato,the Bureau’s first female commissioner, joined the

organization in the year of 1993.
Liwayway Vinzonz-Chato is a graduate of the University of the Philippines College

of Law, Vinzons-Chato was born (December 31, 1945) and a Filipino Politician and
member of the Liberal Party,
Ramos Administration
•Greater political stability in 1992 allowed for continued economic growth
•the administration ventured to it’s own tax reform in 1997
Comprehensive Tax Reform Program (CTRP) known as the ACTS or Action-

Centered Transformation Program.
-is a package of reforms which aimed to establish a more pregressive tax system that
is economically efficient and social equitable.
•Comprehensive Tax reform program is aimed at
1.To make the tax system broad-based, simple,and with reasonable tax rates
2.Minimize tax avoidance
3.Encourage payment (3 example)
-increasing tax exemption levels
-lowering highest tax rates
-simplifying procedure
4.Rationalize tax incentives
- The total of 31.1 billion pesos in 1994

-In 1994, a five-year tax computerization project (TCP) was started under
Commissioner Chato’s leadership. This included putting in place an advanced,
computerized integrated tax system and internal management system.
In order to facilitate the deployment of the computerized Integrated Tax System,

additional simplification of the BIR was permitted in July 1997 by the passing of EO
No. 430. Notable highlights of the aforementioned EO were the:
1. The establishment of the Legal and Enforcement Group, a fourth Revenue

Group under the BIR led by a Deputy Commissioner;
2. The establishment of the Revenue Data Centers, the Information Planning and
Quality Service, the Internal Affairs Service, and the Taxpayers Assistance
Service.
IX. Estrada Administration

Joseph Ejercito Estrada (ERAP) – the 13th President of the Philippines from 1998
to 2001.
With the advent of President Estrada’s administration, a Deputy Commissioner

of the BIR, Beethoven Rualo, was appointed as Commissioner of Internal Revenue.
Under his leadership, priority reform measures were undertaken 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.
In order to encourage and educate consumers/taxpayers to demand sales

invoices and receipts, the raffle promo “Humingi ng Resibo, Manalo ng Libo-Libo”
was institutionalized in 1999. 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.
On 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. Shortly after the
establishment of said revenue services, a new organizational structure was approved
on October 31, 2001 under EO No. 306 which resulted in the integration of the
functions of the ETS and the LTS.
In line with 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
X. Arroyo Administration
 GLORIA MAKAPAGAL ARROYO (GMA)

 14TH PRESIDENT OF THE PHLIPPINES
 SHE WAS THE LONGEST SERVING PRESIDENT OF THE PHILIPPINES OF THE SINCE
FERDINAND MARCOS
Estrada was soon forced out from office by the Second EDSA Revolution in 2001, and
Arroyo was sworn into the presidency by Chief Justice Hilario Davide, Jr. on January 20,
2001.
ARROYO ADMINISTRATION
Under Commissioner Bañez's administration, the BIR's thrust was to transform the agency
to make it taxpayer-focused. This was undertaken through the implementation 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 administrativeflexibility; and
4) Redesign the human resource policies, systems, and procedures to transform the
workforce to be more responsive to taxpayers' needs.
DURING ARROYO ADDIMISTRATION SEVERRAL TAX REFORM

OR IMPLEMENTED INCLUDING :
She increased the government spending without adjusting the tax collections
The Expanded Value Added Tax (EVAT) was signed into law as Republic Act 9537. 2006
The VAT tax rate was also increased from 10% to 12%

RPH Taxation

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PHILIPPINE COLLEGE OF SCIENCE AND TECHNOLOGY

Old Nalsian Road, Nalsian, Calasiao, Pangasinan, Philippines 2418

Philippine Taxation and the History of the Bureau of Internal Revenue

Taxes During Spanish Era in the Philippines were:

4.) CAJA DE COMMUNIDAD

5.) SERVICIO PERSONAL ( Polo y Servicio )

III. American Era

Three (3) further American collectors:

- Ellis Cromwell (1909-1922)

Thereafter, the Burue establish the following:

IV. Japanese Era

VI. Marcos Administration

VII. Cory Aquino Administration

VIII. Ramos Administration

In the year of Ramos Administration

Liwayway Vinzonz-Chato,the Bureau’s first female commissioner, joined the

Liwayway Vinzonz-Chato is a graduate of the University of the Philippines College

•Greater political stability in 1992 allowed for continued economic growth

•the administration ventured to it’s own tax reform in 1997

Comprehensive Tax Reform Program (CTRP) known as the ACTS or Action-

•Comprehensive Tax reform program is aimed at

2.Minimize tax avoidance

3.Encourage payment (3 example)

-increasing tax exemption levels

-lowering highest tax rates

4.Rationalize tax incentives

- The total of 31.1 billion pesos in 1994

In order to facilitate the deployment of the computerized Integrated Tax System,

1. The establishment of the Legal and Enforcement Group, a fourth Revenue

IX. Estrada Administration

With the advent of President Estrada’s administration, a Deputy Commissioner

In order to encourage and educate consumers/taxpayers to demand sales

 GLORIA MAKAPAGAL ARROYO (GMA)

DURING ARROYO ADDIMISTRATION SEVERRAL TAX REFORM

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