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Taxation in The Philippine S
Taxation in The Philippine S
in the
Philippine
HISTORY
OF
TAXATION
ANCIENT FILIPINOS
• Where they pay their taxes to their datu or Chiefs for the protection given to them.
• Tax was termed buwis.
• Everyone is required to pay their taxes, except for the Datu/Chieftain’s household.
INVASION OF SPANIARDS
• Spanish people from 1521 to 1898 gave the Filipinos modern concepts of taxation.
• Wherein 16 years to 60 years old where forced to pay tributes or tribute to the king of the
Spain through the Colonial Government worth 8 reales or 1 peso per year, but there are also other
forms of payment like gold ,chickens, textile. Rice and forced labor or Polo y Servicio.
SEDULA
• In 1884,the tribute was abolished and was replaced by the cedula or sedula.
TRAIN LAW
• Signed last January 01, 2018, which seeks to correct a number of deficiencies in the tax
system to make it simpler, fairer, and more efficient.
• Wherein the rich will have a bigger contribution and the poor will benefit more from the
government’s program and services.
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 a 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.
Theory of taxation
“LIFEBLOOD THEORY”
“BENEFITS-RECEIVED PRINCIPLE”
Taxation is the inherent power of the state to impose and demand contributions
upon persons, properties, or rights for the purpose of generating revenues for
the public purposes.
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 on the ability to pay
principle; the higher income of the tax payer the bigger amount of the tax paid.
It is levied(to impose; collect) on person or property. There are taxes that are imposed or
levied on acts, rights or privileges.
It is levied by the state which has jurisdiction over the person or property. As a general
rule, only persons, properties, acts, right or transaction with in the jurisdiction of the taxing
state are subject for taxation
It is levied by the law making body of the state. This means that a prior law must be
enacted first by the congress before assessment and collection may be implemented of the
1987 constitution.
It is levied for the public purposes. Taxes or imposed to support the government for the
implementation of projects and programs.
Classification of taxes
1. As to subject matter
• Personal, Poll or Capitation Tax (ex. Residence Tax)
• Property Tax. (ex. Real State Tax)
2. As to who bears the burden
• Direct Tax (ex. Income Tax)
• Indirect Tax (ex. Buying of goods and services(RVAT))
3. As to purpose
General Tax(ex. Almost all taxes)
Special Tax
4. As to scope
National Tax(ex. National Revenue Taxes)
Local Tax
Principles of Taxation
Fiscal adequacy. Means that the sources of the revenue taken as a whole should be
sufficient to meet the expanding expenditures of the government regardless of business,
export taxes, trade balances, and problems of economic adjustment. Revenues should be
capable expanding or contracting annually in response to variations of public expenditures.
Equality or Theoretical Justice. Means the taxes levied must be base upon the ability of
the citizen to pay.
Administrative Feasibility. This principle connotes that in a successful tax system, such
tax should be clear and plain to taxpayers, capable of enforcement by an adequate and well-
trained staff of public office, convenient as to the time and manner payment, and not unduly
burdensome upon on discouraging to business activity.
Consistency or Compatibility with Economic Goals. This refer to the tax laws that should
be consistent with economic goals or programs of the government. This are the basic
services intended for masses.
Tax Exemption
• Religious Institutions
• Charitable Institutions
• Non-profit, Non-Stock Educational
Institutions
• Non-profit Cemeteries
• Government Institutions
• Foreign Diplomats
How to pay tax?
How to Compute Income Tax in the Philippines
Computing income tax expense and payable is different for individuals and
corporations. Taxable corporations may be taxed using a fixed income tax
rate.
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