Taxation in the Philippines

What is tax?
TAXATION is defined in many ways. Commonly heard definitions
include;
• It is the process by which the sovereign, through its law making
body, races revenues use to defray expenses of government.
• It is means of government in increasing its revenue under the
authority of the law, purposely used to promote welfare and
protection of its citizenry.
• It is the collection of the share of individual and organizational
income by the government under the authority of the law.
Concept of Tax
Taxation is the inherent power of the state to
impose and demand contribution upon persons, properties,
or rights for the purpose of generating revenues for public
purposes.
The power of taxation upon necessity and is inherent in
every government or sovereignty.
Distinction of Tax
Tax distinguish from Toll
-A tax is demand of sovereignty, while toll is demand for
proprietorship.
-A tax is paid for the use of the government’s property, while
while a toll is paid for the used of another’s property.
-A tax maybe imposed by the government only, while a toll is
enforced by the government or a private individual or entity.
Tax distinguish from debt
• A tax is base on law, while a debt is based on contract
• A tax may not be assignable, while a debt is assignable.
• A tax is generally payable in cash, while debt is payable in
cash or in kind.
• A person maybe imprisoned for non-payment of taxes, but
any person may not be imprisoned for non-payment of
debt.
What is the History of Tax?

To support the colony, several taxes and monopolies were

established . The buwis
(tribute) , which could be paid in cash or kind, with
tobacco, chickens, produce, gold, blankets, cotton, rice,
or other products depending on the region of the country.
 Purposes and Significance of Tax

Primary purpose generates funds or revenues use to

defray expenses incurred by the government in
promoting the general welfare of its citizenry. Public
expenditure.
Other purposes;
to equitably contribute to the wealth of the nation.
 Characteristics of Tax
It is enforced contribution- Its payment is not voluntary nature, and the
imposition is not dependent upon the will of the person taxed.
It is generally payable in cash- This means that payment by checks,
promissory notes,
or in kind is not accepted.
It is proportionate in character- Payment of taxes should be base of the
ability to pay principle; the higher income of the tax payer the bigger
amount of the tax paid.
 Classification of Taxes

1. As to subject matter
• Personal, Poll or Capitation Tax (Residence Tax)
• Property Tax (Real State Tax)
2. As to whom bears the burden
• Direct Tax (Income Tax)
• Indirect Tax ( Buying of goods and services)
 Tax Exemption

• Religious Institutions
• Charitable Institutions
• Non-Profit, Non-Stock Educational Institutions
• Non-Profit Cemeteries
• Government Institutions
• Foreign Diplomats