RPH Evolution-of-Philippine-taxation.pptx



from the viewer, the smaller is the size of the object. Relative size is supported by the concept of linear perspective. Parallel lines that meet at the horizon give the illusion of distance. Objects, therefore, become smaller the nearer they are to the point in the horizon where the two lines converge.
Atmospheric Perspective. This is also known as aerial perspective. The illusion of depth is created by techniques known as gradient (a gradual change). This may be a gradient in texture, brightness, color intensity, and combination of warm and cool colors. To understand gradient better, the picture plane is divided into three parts: the lower part is the foreground, which is nearest to the viewer, the second is the middle ground, and the upper part of the picture plane is the background. In applying gradient to give the illusion of depth, objects in the foreground would be bigger, detailed, and brighter. As the eye moves to the middle ground, the objects' appearance would gradually change. In the middle ground objects would be smaller compared with those in the foreground. There would be less detail, and colors are not so bright. When the viewer looks at the background, objects will be smaller, they will have very little detail, and the colors are hazy giving the illusion of distance.

1. Taxation Prepared by: Dave Daniel Bautista

2. Definition of Taxation Refers to the fees and financial and financial obligations imposed by a government on it’s residents. It applies to all payments of mandatory levies, including on income, corporate, property, capital gains, sales and inheritance.

3. Definition of Taxation is a fact that all citizens must deal with because the government needs to raise r evenue from the people it governs in order to function properly.

4. Evolution of Philippine Taxation

5. Before the Spanish era The Philippines may have abundant natural resources even before the encroachment of the Spaniards of the, but our ancestors were mainly involve in a subsistence economy, while the payment of tribute or taxes ( buhis , buwis / handug ) or the obligations to provide labor services to the datus in some early Filipino Communities in The Philippines History.

6. Spanish Era The arrival of the Spaniards Imposed the payment of tributos (tributes) from the Filipinos ● Purpose: to generate resources to finance the maintenance of islands, such as salaries of government officials and expenses of clergy.

7. Spanish Era The arrival of the Spaniards Imposed the payment of tributos (tributes) from the Filipinos ● Purpose: to generate resources to finance the maintenance of islands, such as salaries of government officials and expenses of clergy.

8. Spanish Era The difficulty faced by the Spaniards in revenue collection so the tribute was the dispersed by the natured of the Spaniard, which they solved by introduction of “ R educcion ”. Was later handled by encomenderos who received rewards for their services EXEMPTION: principales , alcaldes, gobernadores , cabeza de barangay, soldier, member of civil guard, government officials.

9. Spanish Era 16 th century: The Manila-Acapulco trade (The Galleon Trade) was established where it is way which the Spaniards could make sure that European presence would be sustained. Once a year , the galleon would be loaded up with merchandise to Asia and sent to new Spain (Mexico).

10. 16 th century: The Manila-Acapulco trade (The Galleon Trade) was established where it is way which the Spaniards could make sure that European presence would be sustained. Once a year , the galleon would be loaded up with merchandise to Asia and sent to new Spain (Mexico).

11. Spanish Era 1884: the payment of tribute was halted and replaced by a poll tax collected through a certificate of identification called the cedula personal. It benefited the income of the government, but it was still a burden to the peasants.

12. Two Types of Tax During the Spanish Era Direct tax URBANA–tax on annual rental those who live on urban areas. I NSDUSTRIA–tax on salaries, dividends, and profits. INDIRECT TAX–involved custom duties in terms of exporting and importing

13. The colonial government gained income from monopolies. The government gained income from monopolies like sales of stamped papers, liquor, and opium but the biggest of the state monopolies was tobacco. It started during1781 until 1882

14. Other types during the Spanish era ● Forced labor was also a character of taxation in the Philippines, as Spain required labor from Filipinos They are required to work including woodcutting and shipbuilding especially during the galleon trade. Through the POLO SYSTEM or the polo y servicios , male Filipinos were obliged to serve . Males were required to work 40 days per year and they are paying the fallas of 3 pesosper year but it was just lost in corruption since it was collected on the municipal level and were known as CAIDAS or droppings. Additionally, by the second half of the 19 th century, the polos were called prestacion personal (personal services).

15. Taxation was characterized by the heavy burden. During this era, taxation was characterized by the heavy burden on the Filipinos and the corruption of the principales . Spanish Era

16. ● 1898 to 1903: the Americans followed the Spanish system of taxation with some modifications : The urbana was replaced by a real estate tax called a land tax. They suspended the contracts for the sale of opium, lottery, and mint . They the urbana of real estate tax into land tax wherein they collect levied on both urban and rural areas. American Era

17. THE INTERNAL REVENUE LAW OF TAX OF 1904. was passed as a reaction to the problems of collecting land tax. prescribed 10 significant sources of revenue: 1. License taxes on firms dealing in alcohol and tobacco; 2. Excise taxes on alcohol and tobacco products; 3. Taxes on banks and bankers; 4. Document stamp taxes American Era

18. 5. The cedula; 6. Taxes on insurance and insurance companies; 7. Taxes on forest products; 8. Mining concession tax; 9. Tax on business and manufacturing; 10. Occupational licenses. American Era

19. ● The cedula changes in the new law. The cedula also changes in the new law as the rate was fixed per male adult. Andin 1907, the fee was doubled for cedula to support the maintenance and construction of roads. ● The industria tax was levied on the business community and became a highly complexsystem that assigned a particular tax to an industrial or commercial activity according toits profitability. The industria tax was levied on the business economy that assigned a particulartax sa mga industrial or commercial activity based on its profitability. The new law alsoi mposed a percentage tax on sales payable quarterly. American Era

20. ● The cedula changes in the new law. The cedula also changes in the new law as the rate was fixed per male adult. Andin 1907, the fee was doubled for cedula to support the maintenance and construction of roads. American Era

21. ● The industria tax was levied on the business community and became a highly complex system that assigned a particular tax to an industrial or commercial activity according toits profitability. The industria tax was levied on the business economy that assigned a particular tax to the industrial or commercial activity based on its profitability. The new law also imposed a percentage tax on sales payable quarterly. American Era

22. ● The industria tax was levied on the business community and became a highly complex system that assigned a particular tax to an industrial or commercial activity according toits profitability. The industria tax was levied on the business economy that assigned a particular tax sa mga industrial or commercial activity based on its profitability. The new law also imposed a percentage tax on sales payable quarterly. American Era

23. ●1913: the Underwood-Simmons Tarrif Act was passed. This tariff act resulted in the decline on the government revenue since the export taxes levied on sugar, tobacco, hemp and copra were lifted. But to make up to this loss,the Governor-General Francis Burton Harrison urged to increase the tax receipts. ●1914: Income tax ●1919: Inheritance tax (assets inherited from a deceased person) American Era

24. Taxation during the Commonwealth Period New measures and legislation were introduced to make the taxation system appear more equitable during the commonwealth. ● 1936: Income tax rates were increased. ● 1937: cedula tax was abolished 1940: residence tax was imposed on every citizen aged 18 years old and on every corporation. Commonwealth Era

25. In 1939, the commonwealth government drafted the National Internal Revenue Code, introducing major changes in the new tax system, as follows: 1. The normal tax of tree percent and the surtax on income was replaced by a single tax at a progressive rate. 2. Personal exemption we’re reduced. 3. Corporation income tax was slightly increased by introducing taxes on inherited estates or gifts donated in the name of dead persons. 4. The cumulative sales tax was replaced by a single turnover tax of 10% on luxuries. 5. Taxes on liquors, cigarettes, forestry products, and mining were increased. Commonwealth Era

26. In 1939, the commonwealth government drafted the National Internal Revenue Code, introducing major changes in the new tax system, as follows: 6. Dividends were made taxable. The introduced tax structure was an improvement of the earlier system introducedby the Americans, but still remained inequitable. The lower class still felt the bulk of the burden of taxations, while the upper class, the landed elite or the people in political positions, were able to maneuver the situation that would benefit them more. The agriculture sector was still taxed low to promote growth, but there was no incentive for industrial investment to take root and develop. Commonwealth Era

27. In 1939, the commonwealth government drafted the National Internal Revenue Code, introducing major changes in the new tax system, as follows: 6. Dividends were made taxable. The introduced tax structure was an improvement of the earlier system introduced by the Americans, but still remained inequitable. The lower class still felt the bulk of the burden of taxations, while the upper class, the landed elite or the people in political positions, were able to maneuver the situation that would benefit them more. The agriculture sector was still taxed low to promote growth, but there was no incentive for industrial investment to take root and develop. Commonwealth Era

28. In 1939, the commonwealth government drafted the National Internal Revenue Code, introducing major changes in the new tax system, as follows: 6. Dividends were made taxable. The introduced tax structure was an improvement of the earlier system introducedby the Americans, but still remained inequitable. The lower class still felt the bulk of the burden of taxations, while the upper class, the landed elite or the people in political positions, were able to maneuver the situation that would benefit them more. The agriculture sector was still taxed low to promote growth, but there was no incentive for industrial investment to take root and develop. Commonwealth Era

29. Fiscal Policy from 1946 to present

30. Fiscal Policy from 1946 to present Roxas Regime (1946 – 1948) He rejected the advised of the United States in tax collection The war affected the Philippine economy especially the capital Manila and the a griculture-based economy was disrupted. And even though the US have already d eclared the independence of the Philippines.

31. Fiscal Policy from 1946 to present Quirino Regime (1948 – 1953) The impetus for economic growth came through the implementation of import and Exchange controls that led to import substitution development. Tax revenue in 1953 increased twofold compared to 1948.

32. Fiscal Policy from 1946 to present Quirino Regime (1948 – 1953) There is an implementation of import and export exchange that led to import substitution for development. During his time, he increased ang corporate tax rates which led to the increased in the Government revenue in 1953 of twofold compared to 1948

33. Fiscal Policy from 1946 to present (Ramon) Magsaysay, (Carlos) Garcia, & (Diosdado ) Macapagal Regime (1953 – 1965) Promised to study the tax structure and policy of the country (through the Creation of a Tax Commission in 1959 means of republic Act No. 2211) The period of the post-war republic also saw a rise in corruption.

34. Fiscal Policy from 1946 to present (Ramon) Magsaysay, (Carlos) Garcia, & (Diosdado ) Macapagal Regime (1953 – 1965) Indirect taxation still contributed to three quarters of tax revenues and the Omnibus Tax Law of 1969 did not increase the ratio of income tax to general tax. The administration promised to study the tax structure and policy of the country t hrough the use of Tax Commission in 1959 or the Joint Legislative Executive Tax Commission (JLETC).

35. Fiscal Policy from 1946 to present (Ramon) Magsaysay, (Carlos) Garcia, & (Diosdado ) Macapagal Regime (1953 – 1965) During their time, ang economic system natin was characterized by overburdening t he lowest class, while the landed elite were in Congress to ensure that they will not be imposed to their taxes.

36. Fiscal Policy from 1946 to present Marcos Authoritarian Regime (1965 – 1986) During 1981 – 1985, the tax system was still heavily dependent on indirect taxes, w hich made up 70% of total collection.

37. Fiscal Policy from 1946 to present Marcos Authoritarian Regime (1965 – 1986) Taxes grew at an average annual rate of 15% and generated a low tax yield. The administration was focused on indirect tax collection and on the government s pending on economic services and infrastructure development.

38. Fiscal Policy from 1946 to present Aquino Regime (1986 – 1992) Reformed the tax system through the 1986 Tax Reform Program A major reform in the tax system introduced under the term Aquino was the Introduction of the Value Added Tax (VAT). Her term was after the EDSA Revolution and she reformed the tax system through t he 1986 Tax Reform Program.

39. Fiscal Policy from 1946 to present Aquino Regime (1986 – 1992) During her time as well, she introduce the Value Added Tax (VAT) Wherein there’s t his rule have uniform rate of 10% when selling both domestic and imported products, Based on its gross receipts. Additionally, foreign currency denominated the sales

40. Fiscal Policy from 1946 to present • Ramos Regime (1992 – 1998) Ventured into its own tax reform program in 1997 through the Comprehensive Tax Reform Program. The VAT base was also broadened in 1997 to include services, through Republic Act 7716

41. Fiscal Policy from 1946 to present • Ramos Regime (1992 – 1998) During his administration, the government had greater political stability. And the Administration continued the tax reform program through the COMPREHENSIVE TAX REFORM PROGRAM-its purpose is to capture those hidden tax payers and undeclared Revenue and to also avoid tax avoidance and abuse.

42. Fiscal Policy from 1946 to present • Estrada Regime (1998 – 2000) His succeeding term was too short to constitute in any change in the tax system There were no changes in the tax system as his term was too short to constitute.

43. Fiscal Policy from 1946 to present Arroyo Regime (2000 – 2010) Undertook increased government spending without adjusting tax collections In 2005, the Expanded Value added Tax (E-VAT) was signed into law as Republic Act 9337. In February 2006, the VAT rate was also increased from 10% - 12%

44. Fiscal Policy from 1946 to present Aquino Regime (2010 – 2016) Ventured into the adjustment of excise tax on liquor and cigarette or the Sin Tax Reform made law by Republic Act 1035. It allows the increase the budget of the DOH and PhilHealth (from 55.2 million in 2012 to 515.4 million in 2015)

45. Fiscal Policy from 1946 to present Aquino Regime (2010 – 2016) His new reform, Sin Tax Reform was mainly aims to address the smoking and d rinking problem in the country. The said reform adjust the excise tax on liquor and Cigarettes.

46. Fiscal Policy from 1946 to present Duterte Regime (2016 – 2023) Supported the implementation of the Tax Reform for Acceleration and Inclusion Law (TRAIN Law). Vowed to lower income tax rates shouldered by working Filipinos. The proposed tax reform also seeks to limit VAT exceptions and increase excise Tax on petroleum products and automobiles.

47. “ No government can ever exist without it, as taxes are the Government’s lifeblood.”

48. Thank you for Listening