Readings in Philippine History-Taxation-Final.pptx

Philippine Taxation History

1. Taxation in the Philippines

2. HISTORY OF TAXATION

3. 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 .

4. SEDULA In 1884,the tribute was abolished and was replaced by the cedula or sedula . 1987 PHILIPPINE CONSTITUTION “sets limitations on the exercise of the power to tax. The rule of taxation shall be uniform and equitable. The congress shall evolve a progressive system of taxation” National taxes refer to national internal revenue taxes imposed and collected by the national government through BIR(Bureau of Internal Revenue). Local taxes is those imposed and collected by the local government 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.

5. 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.

6. Theory of taxation “ LIFEBLOOD THEORY ” Like blood which acts as a support to every human organ so it could perform every duty inside the body, tax acts as the blood which supports government and state.

7. Basis of Taxation “BENEFITS-RECEIVED PRINCIPLE” Reciprocal duties of protection and support between the state and its inhabitants .

8. Commissioner vs. Algue , Inc . It is said that taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for the lack of motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of one’s hard earned income to the taxing authorities, every person who is able must contribute his share in the running of the government.

9. The government for its part, is expected to respond In the form of benefits intended to improve the lives of the people. This symbiotic relationship is the rationale of taxation And should dispel the erroneous notion that it is an arbitrary method of exaction by those in the seat of power. But even we concede the inevitability and indispensability of taxation, it is a requirement in all democratic regimes that it be exercised reasonably and in accordance with the prescribed procedure. If it is not, then the taxpayer has a right to complain and will come to his succor.

10. Concept of Tax 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. The power of taxation upon necessity and is inherent in every government or sovereignty.

11. Distinction of Tax Tax distinguished 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 toll is paid for the use of another’s property. A tax may be imposed by the government only, while a toll is enforced by the government or a private individual or entity. Tax distinguished from penalty A taxis intended to raise revenue, while penalty is designed to regulate conduct. A tax may be imposed by the government only while a penaly may be imposed by the government or a private individual .

12. Tax distinguished from Debt A tax is base on law, while debt is based on contract. A tax may not be assignable, while a debt is assignable. A tax is generally playable in cash, while debt is payable in cash or in kind. A person may be imprisoned for a non-payment of taxes, but any person may not be imprisoned for non-payment of debt.

13. Purposed 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.

14. 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.

15. 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.

16. Classification of taxes 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

17. 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.

18. Tax Exemption Religious Institutions Charitable Institutions Non-profit, Non-Stock Educational Institutions Non-profit Cemeteries Government Institutions Foreign Diplomats

19. 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 . On the other hand, if you are a self-employed professional or an owner of an single proprietorship business, your income tax expense is computed using graduated tax rate. i t is a progressive tax which tax the tax rate increases as the taxable base amount increases. This means that the higher taxable income you have, the higher you income tax expense is.

20. Government Budget and Expenditures In National Income Accounting, government spending, government expenditure, or government spending goods and services includes all government consumption and investment by a state.

21. Government acquisition of goods and services for current use to directly satisfy individual or collective needs of the members of the community is called government final consumption expenditure(GFCE) Government acquisition of goods and services intended to create future benefits, such as infrastructure investment of research spending, is called gross fixed capital formation, or government investment, which usually is the largest part of the government

22. SOURCES: https://www.slideshare.net/krista3633/01-general-principles-of-taxation?next_slideshow=1 https://www.slideshare.net/cheryldemafiles2731/my-presentation-taxation https://whatistrainlaw.wordpress.com/2018/03/11/history-of-taxation-in-the-philippines/#:~:text=It%20all%20started%20from%20the,the%20tax%20was%20termed%20buwis.&text=The%20congress%20shall%20evolve%20a,covers%20both%20national%20and%20local .