TAXES

ORDUNA SANTOS

DUMALAG PINES
WHAT IS TAXATION?
• Means laying a tax through which the government generates income
to defray its expenses.
• It is a way to raise funds for government programs and services that
benefit Filipino citizens.
• Economic investments and businesses in the Philippines have
created several definitions of taxations enforced by national or local
laws for income collection and development of the government.
PURPOSE OF TAXATION
It is enforced as a contribution but it is
proportionate to the citizen’s ability to pay it is
levied on persons (who actually pay with money)
and property as well on business transactions,
privileges, and benefits the imposition of taxes is
done by law through the Bureau of Internal
Revenue.
TYPES OF NATIONAL
TAXES
 Capital Gains Tax

 Capital Gains Tax is a tax imposed on gains that may

have been realized by a seller from the sale, exchange,
or other disposition of capital assets located in the
Philippines, including pacto de retro sales (a sale with a
condition for repurchase) and other forms of conditional
sale.
 Documentary Stamp Tax

 Documentary Stamp Tax is a tax on documents,

instruments, loan agreements, and papers evidencing the
acceptance, assignment, sale, or transfer of an obligation,
rights, or property incident thereto.
 Donor's Tax

 Donor's Tax is a tax on a donation or gift. It is also a tax

imposed on the gratuitous transfer of property between two
or more persons who are living at the time of the transfer.
 Estate Tax

 Estate Tax is a tax on the right of the deceased person to

transmit his/her estate to lawful heirs and beneficiaries at
the time of death and on certain transfers which are
made by law as equivalent to testamentary disposition. It
is not a tax on property. It is a tax imposed on the
privilege of transmitting property upon the death of the
owner.
 Income Tax
 Income Tax is a tax on all annual profits made from
property ownership, profession, trades or offices. It is also
a tax on a person's income, emoluments, profits and the
like. Self-employed individuals and corporate tax rate.
while corporate income tax in based on a fixed rate
prescribed by the tax law or special law.
 Percentage Tax
 Percentage Tax is a business tax imposed on persons or
entities who sell or lease goods, properties, or services in
the course of trade or business whose gross annual sales
or receipts do not exceed the amount required to register
as VAT-registered taxpayers.
 Value-Added

 Value-Added Tax is a business tax imposed and collected

from the seller in the course of trade or business on every
sale of properties (real or personal), lease of goods or
properties (real or personal), or vendors of services. It is
an indirect tax, thus, it can be passed on to the buyer,
causing the increase of prices of most goods and services
bought and paid by consumers.
 Excise Tax

 Excise Tax is a tax imposed on goods manufactured or

produced in the Philippines for domestic sale or
consumption or any other disposition. It is also
imposed on things that are imported.
 Withholding Tax

 Withholding Tax on Compensation is the tax withheld

from individuals receiving purely compensation income
arising from an employer-employee relationship. This tax
is what employers withheld in their employees'
compensation income and remit to the government
through the BIR or authorized accrediting agent.
 Expanded Withholding Tax

 Expanded Withholding Tax is prescribed only for certain

payors like those withheld on rental income and
professional income. It is creditable against the income
tax due of the payee for the taxable quarter year.
 Final Withholding Tax

 Final Withholding Tax is a kind of withholding tax which

is prescribed only for certain payors and is not creditable
against the income tax due of the payee for the taxable
year. An example of final withholding tax is the tax
withheld by banks on the interest income earned on
bank deposits.
 Withholding Tax

 Withholding Tax on Government Money Payments is the

withholding tax withheld by government offices including
government-owned or -controlled corporations and local
government units, before making any payments
corporations, partnerships and/or associations.
TYPES OF LOCAL TAXES
 Local taxes
– Local government taxation in the Philippines as
stated in Republic Act 7160 or the Local
Government Code of 1991, as amended. These
taxes, fees, or charges are imposed by the local
government units, such as provinces, cities,
municipalities, and barangays.
Tax on Transfer of Real Property
Ownership

Is imposed on the sale, donation, barter, or

on any other mode of transferring
ownership of real property.
Tax on Business of Printing and
Publication

 Is imposed on printing and publication businesses

like that of books, cards, posters, leaflets,
handbills, certificates, receipts, pamphlets, and
others of similar nature.
 Franchise Tax

 is a tax on franchised businesses, at the

rate not exceeding fifty percent (50%) of
one percent (1%) of the gross annual
receipts of the preceding calendar year
based on the incoming receipt (the
annual earning) within the territorial
jurisdiction where the franchise is selling
in.
 Tax on Sand, Gravel, and
Other Quarry Resources
 is imposed on ordinary stones, sand, gravel,
earth, and quarry resources, as defined
under the National Internal Revenue Code,
as amended. This refers to the above
materials that are extracted from public
lands or from the beds of seas, lakes, rivers,
streams, creeks, and other public waters
within its territorial jurisdiction.
 Professional Tax

 Is an annual tax on each person engaged in the

exercise or practice of his or her profession that
requires government examination, like licensure
examinations.
Amusement Tax

is a tax collected from the

proprietors, lessees, or
operators of theaters,
cinemas, concert halls,
circuses, boxing stadia, and
other places of amusement.
 Annual Fixed Tax for Every Delivery Truck or
Van of Manufacturers or Producers,
Wholesalers of, Dealers, or Retailers in

 Certain Products is an annual fixed tax for every truck, van or any vehicle
used by manufacturers, producers, wholesalers, dealers, or retailers in
the delivery or distribution of distilled spirits, fermented liquors, soft
drinks, cigars and cigarettes, and other products to sales outlets, or
consumers, whether directly or indirectly, within the province. This type
of tax is usually imposed as determined by the local provincial councils
through which the truck or trucks pass through or deliver their cargo.
 Tax on Business
 is imposed by cities or municipalities on
businesses before they will be issued a business
license or permit to start operations based on
the schedule of rates prescribed by the local
government code, as amended. Businessmen
pay this tax if they apply for a Mayor's Permit to
conduct their business in the local government
unit. Rates of these taxes vary among cities and
municipalities.
 Fees for Sealing and
Licensing of Weights and
Measures

 This is to impose regulations with regards

to such weights and measures prescribed
by the city, provincial or municipal council.
Fishery Rentals, Fees, and
Charges

 are imposed by the municipality/city to

grantees of fishery privileges in the
municipal/city waters especially the
privilege to build fish corrals, oysters,
mussels, or other aquatic beds or
bangus fry areas and others as specified
in the Local Government Code.
Community Tax
 is the tax levied by cities or municipalities to
every Filipino or alien living in the
Philippines. Community tax is also imposed
on every corporation no matter how created
or organized, whether domestic or resident
foreign, engaged in or doing business in the
Philippines.
Taxes levied by the barangays
on stores or retailers with
fixed business establishments
 with gross sales of receipts of the
preceding calendar year amounting to
fifty thousand pesos (P50,000.00) or less,
(for city barangays) and thirty thousand
pesos (P30,000.00) or less, (for municipal
barangays), at a rate not exceeding one
percent (1%) on such gross sales or
receipts.
Service Fees or Charges

 are fees or charges collected by the

barangays for services rendered in
connection with the regulation or the
use of barangay-owned properties or
service facilities, such as palay, copra,
or tobacco dryers.
 Barangay Clearance

 is a fee collected by barangays upon issuance of

barangay clearance, a document required for many
government transactions, such as when getting a
business permit from a city or municipal
government or applying for a job in a government
office or a private company
How are the national taxes
similar to and/or different
from local taxes
 The similarities between this two taxes is all
implemented by government authority
 The difference between two taxes

National taxes
– National taxes are the ones paid to the government through the
Bureau of Internal Revenue (BIR). Our national taxation system is
based on the National Internal Revenue Code of 1997 or the Republic
Act No. 8424 also known as the Tax Reform Act of 1997, as amended.
Local taxes
– A local tax is a tax assessed and levied by a local authority such as a
state, county, or municipality. A local tax is usually collected in the
form of property taxes and is used to fund a wide range of civic
services from garbage collection to sewer maintenance.
Most of the taxes that apply in National taxes

• Capital Gains Tax

• Income Tax
• Dividends Tax
• Documentary Stamp Tax
• Withholding Tax On Income Payments
• Value Added Tax
• Donor’s Tax And
• Branch Profit Remittance Tax.
 Most of the taxes that apply in Local
Taxes

• local business tax.

• real property tax.
THANK YOU :>