GROUP 1 PRESENTATION

Almeida, Russein Marie

Asiong, Crisanta
Bombase, Trixia May
 What is Taxation?
• Taxation refers to the practice of a government collecting
money from its citizens to pay for public services.
• A tax deduction reduces your taxable income. As a result
you pay lower taxes. The higher your tax bracket (the
percentage of the income that you owe in taxes) the more
valuable a tax deduction is. Tax credits reduce the money
you owe in taxes rather than reducing your taxable income.
• The primary goal of a national tax system is to generate
revenues to pay for the expenditures of government at all
levels. Because public expenditures tend to grow at least as
fast as the national product, taxes, as the main vehicle of
government finance, should produce revenues that grow
correspondingly.
ALMEIDA
 Philippine national taxes
• National taxes are mandatory contributions
imposed by the government and collected
through the Bureau of Internal Revenue (BIR),
which is grounded on the Republic Act 8424, or
National Internal Revenue Code of 1997, and
known as Tax Reform Act of 1997. Export and
import tariffs are also referred to as national taxes
but these are levied by the Bureau of Customs
(BOC) and will be excluded from this list.

ALMEIDA
 What are the types of Taxes here in Philippines?

• 1. Estate Tax - Estate tax is charged to your estate

or properties when the titleholder meets their
demise. At a rate of 6%, the heir apparent or the
rightful beneficiary of the estate should settle this
tax before transferring the title to the heir or
beneficiary’s name.
• 2. Documentary Stamp Tax - This refers to the tax
imposed on contracts, loan agreements,
certificates, and other legal papers that serve as
proof of transfer/sale of an ownership/obligation
of a property or assets. ALMEIDA
• 3. Percentage Tax - Percentage tax is a business
tax imposed on merchants or businesses that lease/sell
products, services, and properties. They are not VAT-
registered, with a yearly gross sale at a maximum of
P750,000.
• 4. Capital Gains Tax - Capital Gains tax refers to what an
individual or a business pays upon making profits out of
selling a valuable asset. These sold assets subjected to
capital gains are pieces of jewelry, stocks, properties, and
other goods appraised with high value.
• 5. Income Tax - This refers to the tax that is imposed on an
individual’s earnings, be it salary or profits, from his/her
profession, business, trade, or properties at rates ranging
from 5% to 32% depending on their income bracket.
ALMEIDA
• 6. Withholding Tax- Withholding tax is the amount from an
employee’s wage deducted by the employer and directly
paid to the government for the employee’s partial income
tax.
• 7. Value-Added Tax or VAT- Value-Added Tax serves as a
consumption fee that is placed on a product when there is
an additional value to its manufacturing and final sale. Since
it is considered an indirect tax, the customers pay for VAT.
• 8. Excise Tax- Excise Tax is placed on products sold in the
country and considered an indirect type of tax because this
can be recovered by the seller/producer by increasing the
price of these products. This is emphasized in the TRAIN
law. Example placement of an excise tax can be cited from
the products with health risks such as liquors and tobacco.
ALMEIDA
• 9. Donor’s Tax - Donor’s Tax is placed on a gift, donation,
or willful free-of-charge transfer of property between the
benefactor to recipients on their lifetime. There are
some cases where BIR would scrap this tax. An example
of this is the goods provided to the victims of the
destructive typhoon Yolanda.
Philippine Local Taxes
Local taxes are grounded on the Republic Act 7160, also
known as the Local Government Code of 1991. These
taxes and fees, on the other hand, are levied by the local
government units (provincial, city, municipality, and
barangay).

ALMEIDA
 Types of Local Taxes
• 1. Franchise Tax - This refers to the tax imposed on franchise
businesses at a maximum rate of 50% of the 1% of the gross
yearly receipts for the preceding year.
• 2. Basic Real Property Tax- Basic Real Property Tax cover covers
six types of properties: agricultural, commercial, industrial,
mineral, residential, timberland.
• 3. Sand, Gravel and other Quarry Resources Tax - A maximum
of 10% of fair market value in the location per cubic meter of
quarry resources (such as gravel, sand, common stones, earth,
and sand prized from public lands or waters) will be collected by
LGUs.

ALMEIDA
• 4. Business of Printing and Publication Tax- These taxes are
also collected from publication or printing of books, posters,
pamphlets, cards, tarps, and other print materials.
• 5. Annual Fixed Tax for Delivery Trucks and Vans -Local
government units collect P500 every year from delivery
vehicles such as trucks and vans handling products
(beverages, food, cosmetics, tobacco, etcetera).
• 6. Professional Tax- This type of tax applies to individuals
whose professions require examination from the
government, such as board exams or licensure. These
professionals include lawyers, doctors, engineers, architects
and others subjected to this tax.
• 7. Amusement Tax- Films, theatrical plays, concerts and all
forms of entertainment shows are subjected to tax. It is
commonly added to the admission price or the entrance
tickets. ALMEIDA
• 8. Community Tax -Community tax is a tax for the public
where one must pay an amount depending on your income
bracket. The base fee is P5 and it has an additional increase
of P1 for each P1,000 of income.
• 9. Barangay Tax- Micro-businesses such as retailers and “sari-
sari stores” that earn a gross sale of P50,000 every year have
to pay the barangay tax. The tax will start to accumulate from
the very first day of the first month of each year.
• 10. Barangay Clearance- This certification from the barangay
serves as legal proof of permission to conduct an activity or
start a business in a particular barangay. It is also used as a
documentary requirement on government transactions and
employment.
ALMEIDA