TAXATION IN THE PHILIPPINES

Readings in Philippine History

WHAT IS TAXATION?
Taxation is a term for when a taxing authority, usually a
government, levies or imposes a financial obligation on
its citizens or residents. Paying taxes to governments or
officials has been a mainstay of civilization since ancient
times.
CONCEPT OF TAXATION
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.
Taxes are enforced proportional contributions from
persons and property levied by the lawmaking body of
the state by virtue of its sovereignty for the support of the
government and all public needs.
ESSENTIAL CHARACTERISTICS OF
TAX
1. It is an enforced contribution.
2. It is generally payable in money.
3. It is proportionate in character, usually based on the ability to pay.
4. It is levied on persons and property within the jurisdiction of the state.
5. It is levied pursuant to legislative authority, the power to tax can only be
exercised by the law making body or congress.
6. It is levied for public purpose.
7. It is commonly required to be paid a regular intervals.
TYPES OF TAXES IN THE
PHILIPPINES
National Taxes are those that we pay to the government
through the Bureau of Internal Revenue.
Local Taxes are taxes, fees or charges are imposed by
the local government units, such as provinces, cities,
municipalities, and barangays, who have been given the
power to levy such taxes by the code.
NATIONAL TAXES
Capital Gains Tax is a tax imposed on the gains
presumed to have been realized by the seller from the
sale, exchange, or other disposition of capital assets
located in the Philippines, including pacto de retro sales
and other forms of conditional sale.
NATIONAL TAXES
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.
NATIONAL TAXES
Donor’s Tax is a tax on a donation or gift, and is imposed on the
gratuitous transfer of property between two or more persons who
are living at the time of the transfer.
Estate Tax is a tax on the right of the deceased person to transmit
his/her estate to his/her lawful heirs and beneficiaries at the time
of death and on certain transfers which are made by law as
equivalent to testamentary disposition.
NATIONAL TAXES
Income Tax is a tax on all yearly profits arising from
property, profession, trades or offices or as a tax on a
person’s income, emoluments, profits and the like. Self-
employed individuals and corporate taxpayers pay
quarterly income taxes from 1st quarter to 3rd quarter.
NATIONAL TAXES
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 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.
NATIONAL TAXES
Excise Tax is a tax imposed on goods manufactured or
produced in the Philippines for domestic sale or
consumption or any other disposition.
Expanded Withholding Tax is a kind of withholding tax
which is prescribed only for certain payers and is
creditable against the income tax due of the payee for the
taxable quarter year.
NATIONAL TAXES
Final Withholding Tax is a kind of withholding tax
which is prescribed only for certain payers and is not
creditable against the income tax due of the payee for the
taxable year. Income Tax withheld constitutes the full and
final payment of the Income Tax due from the payee on
the said income.
LOCAL TAXES
Local taxes the local government taxation in the
Philippines are based on Republic Act 7160 or otherwise
known as 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, who have been given the
power to levy such taxes by the code.
LOCAL TAXES
Tax on Transfer of Real Property Ownership – tax
imposed on the sale, donation, barter, or on any other
mode of transferring ownership or title of real property.
Tax on Business of Printing and Publication – tax on
the business of persons engaged in the printing and/or
publication of books, cards, posters, leaflets, handbills,
certificates, receipts, pamphlets, and others of similar
nature.
LOCAL TAXES
Franchise Tax – tax on businesses enjoying a franchise,
at the rate not exceeding fifty percent (50%) of one
percent (1%) of the gross annual receipts for the
preceding calendar year based on the incoming receipt, or
realized, within its territorial jurisdiction.
LOCAL TAXES
Tax on Sand, Gravel and Other Quarry Resources –
tax imposed on ordinary stones, sand, gravel, earth, and
other quarry resources, as defined under the National
Internal Revenue Code, as amended, extracted from
public lands or from the beds of seas, lakes, rivers,
streams, creeks, and other public waters within its
territorial jurisdiction.
LOCAL TAXES
Professional Tax – an annual professional tax on each
person engaged in the exercise or practice of his
profession requiring government examination.
Amusement Tax – tax collected from the proprietors,
lessees, or operators of theaters, cinemas, concert halls,
circuses, boxing stadia, and other places of amusement.
LOCAL TAXES
Tax on Business – taxes imposed by cities, 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.
Fees for Sealing and Licensing of Weights and Measures – fees
for the sealing and licensing of weights and measures at such
reasonable rates as shall be prescribed by the sangguniang bayan
of the municipality or city.
LOCAL TAXES
Fishery Rentals, Fees and Charges – rentals, fees or
charges imposed by the municipality/city to grantees of
fishery privileges in the municipal/city waters, e.g.,
fishery privileges to erect fish corrals, oysters, mussels or
other aquatic beds or bangus fry areas and others as
mentioned in the local government code, as amended.
LOCAL TAXES
Community Tax – tax levied by cities or municipalities
to every inhabitant of the Philippines eighteen (18) years
of age or over who has been regularly employed on a
wage or salary basis for at least thirty (30) consecutive
working days during any calendar year, or who is
engaged in business or occupation, or who owns real
property with an aggregate assessed value of One
thousand pesos (P1,000.00) or more, or who is required
by law to file an income tax return.
LOCAL TAXES
Taxes that may be levied by the barangays on stores
or retailers with fixed business establishments with
gross sales of receipts of the preceding calendar year of
Fifty thousand pesos (P50,000.00) or less, in the case of
cities and Thirty thousand pesos (P30,000.00) or less, in
the case of municipalities, at a rate not exceeding one
percent (1%) on such gross sales or receipts.
LOCAL TAXES
Service Fees or Charges – fees or charges that may be collected
by the barangays for services rendered in connection with the
regulations or the use of barangay-owned properties or service
facilities, such as palay, copra, or tobacco dryers.
Barangay Clearance – a reasonable fee collected by barangays
upon issuance of barangay clearance – a document required for
many government transactions, such as when applying for
business permit with the city or municipality.
 REPRESENTED BY:

Sheila Anne L. Maningding

&
Mac Escat

Don’t forget to wear mask always. Be healthy and stay safe.