Republic of the Philippines

NORTHERN ILOILO STATE UNIVERSITY

Estancia, Iloilo

SCHOOL OF ARTS AND SCIENCES

GE 2 – READINGS IN PHILIPPINE HISTORY

SY 2022-2023

MODULAR APPROACH

SOCIAL SCIENCE DEPARTMENT

Module 4
Lesson 10

Prepared by:

MA. TERESA S. GEVERO, MPA, Ed.D

Republic of the Philippines
NORTHERN ILOILO STATE UNIVERSITY
Estancia, Iloilo

GE 2 – READINGS IN PHILIPPINE HISTORY DR. MA. TERESA S. GEVERO

First Sem. S.Y. 2022-2023 Professor

Module 4 – Social, Political, Economic and Cultural Issues in the Philippine History
Lesson 10 – Taxation

Introduction:

In this module, you shall be introduced to the Nature and Purpose of Taxation; the Types
of National and Local Taxes.

Read the Discussions/Readings and answer the assessment that follows. Perform the
activity and submit on intended schedule of submission.

Intended Learning Outcomes: Upon completion of this Module, you shall be able to:

1. Explain the nature and purpose of taxation;

2. Identify the types of national and local taxes;
3. Argue for us against a current taxation issue.

Discussion:

Taxation means lying a tax through which the government generates income to defray its
expenses. It is a way to raise funds for government programs and services that benefit Filipino
citizens.

A tax is enforced as a contribution but it is proportionate to the citizen’s ability to pay. It

is levied on persons (who actually pay with money) and property as well as on business
transactions, privileges, and benefits. The imposition of taxes is done by law through the Bureau
of Internal Revenue.

Types of Taxes

There are two types of taxes: national and local. National taxes as the ones paid to the
government through the Bureau of Internal Revenue. The national taxation system is based on
the National Internal Revenue Code of 1997 or the Republic Act No. 8424 otherwise known as
the Tax Reform Act of 1997, as amended.

The Types of national taxes are as follows:

1. Capital Gains Taxes is a tax imposed on gains that may have been realized by a
seller from the sale, exchange, or other disposition of capital assets located in the
Philippines, including pacto de retro sales (a sale with a condition for repurchase)
and other forms of conditional sale.
2. Documentary Stamp Tax is a tax on documents, instruments, loan agreements, and
papers evidencing the acceptance, assignment, sale, or transfer, or transfer of an
obligation, rights, or property incident thereto. Documentary stamp taxes are evident
on documents like bank promissory notes, deed of sale, and deed of assignment on
transfer of shares of corporate stock ownership.
3. Donor’s Tax is a tax on donation or gift. T is also a tax imposed on the gratuities
transfer of property between two or more persons who are living at the time of the
transfer.
4. Estate Tax is a tax on the right of the deceased person to transmit his/her estate to
lawful heirs and beneficiaries at the time of death and on certain transfers which are
made by law as equivalent to testamentary disposition.
5. Income Tax is a tax on all annual profits made from property ownership, profession,
trades or offices. It is also a tax on a person’s income, emoluments, profits and the
like.
6. 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 fo not exceed the amount required to register as VAT-registered
taxpayers.
7. 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 properties), or vendors of services.
8. Excise Taxes is a tax imposed on goods manufactured or produced in the
Philippines for domestic sale or consumption or any other disposition.
9. Withholding Tax on Compensation is the tax withheld from individuals receiving
purely compensation income arising from an employer-employee relationship.
10. Expanded Withholding Tax is prescribed only for certain payors like those
withheld on rental income and professional income.
11. Final Withholding Tax is a kind of withholding tax which is prescribed only for
certain payors and is not creditable against the income tax due of the payee for the
taxable year.
12. Withholding Tax on Government Money Payments is the withholding tax
withheld by government offices including government-owned or controlled-
corporations and local government units, before making any payments to private
individuals, corporations, partnerships and/or associations.

Local taxes, on the other hand, include:

1. Tax on Transfer or Real Property Ownership is imposed on the sale, donation,

barter, or on any other mode of transferring ownership of real property.
2. Tax on Business of Printing and Publication is imposed on printing and
publication businesses like that of books, cards, posters, leaflets, handbills,
certificates, receipts, pamphlets, and others of similar nature.
3. Franchise Tax is a tax on franchised businesses, at the rate not exceeding fifty
percent (50%) of one percent (1%) of the gross annual receipts of the preceding
calendar year based on the incoming (receipt the annual earning) within the
territorial jurisdiction where the franchise is selling in.
4. Tax on Sand, Gravel, and Other Quarry Resources is imposed on ordinary
stones, sand, gravel, earth and other quarry resources, as defined under the National
Internal Revenue Code, as amended.
5. Professional Tax is an annual tax on each person engaged in the exercise or
practice of his or her profession that requires government examination, like
licensure examinations.
6. Amusement Tax is a tax collected from the proprietors, lessees, or operators of
theaters, cinemas, concert halls, circuses, boxing stadia, and other places of
amusement.
7. Annual Fixed Tax for Every Delivery Truck or Van of Manufacturers or
Producers, Wholesalers of, Dealers or Retailers in, Certain Products is an
annual fixed for producers, wholesalers, dealers, or retailers in the delivery or
distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes,
and other products to sales outlets, or consumers, whether directly or indirectly.
8. Tax on Business is imposed by cities or municipalities on businesses before they
will be issued a business license or permits to start operations based on the schedule
of rates prescribed by the local government code, as amended.
9. Fees for Sealing and Licensing of Weights and Measures are imposed for the
sealing and licensing of weights and measure.
10. Fishery Rentals, Fees and Charges are imposed by the municipality/city to
grantees of fishery privileges in the municipality/city waters especially the privilege
to build fish corrals, oysters, mussels, or other aquatic beds or bangus fry areas and
others as specified in the Local Government Code.
11. Community Tax is the tax levied by the cities or municipalities to every Filipino or
alien living in 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 (P1000.00) or more, or who us required by law to file an income tax
return.
12. Taxes levied by the barangays on stores or retailers with fixed business
establishments with gross sales of receipts of the preceding calendar year
amounting to fifty thousand pesos (P50,000.00) or less, (for city barangays) and
thirty thousand pesos (P30,000.00) or less, (for municipal barangays), at a rate not
exceeding one percent (1%) on such gross sales or receipts.
13. Service fees or charges are fees or charges collected by the barangays for services
rendered in connection with the regulation or the use of barangay-owned properties
or service facilities, such as palay, copra or tobacco dryers.
14. Barangay Clearance is a free collected by barangays upon issuance of barangay
clearance, a document required for many government transactions, such as hen
getting a business permit from a city or municipal government or applying for a job
in a government office or a private company.

Summary

Taxation means lying a tax through which the government generates income to defray its
expenses. It is a way to raise funds for government programs and services that benefit Filipino
citizens. A tax is enforced as a contribution but it is proportionate to the citizen’s ability to pay. It
is levied on persons (who actually pay with money) and property as well as on business
transactions, privileges, and benefits. The imposition of taxes is done by law through the Bureau
of Internal Revenue. There are two types of taxes: national and local. National taxes as the ones
paid to the government through the Bureau of Internal Revenue. The national taxation system is
based on the National Internal Revenue Code of 1997 or the Republic Act No. 8424 otherwise
known as the Tax Reform Act of 1997, as amended.

Reference:

Torres, Jose Victor Z., BATIS Sources in Philippine History 2018, C&E Publishing Inc. Quezon
City, Philippines.
Republic of the Philippines
NORTHERN ILOILO STATE UNIVERSITY
Estancia, Iloilo

Assessment: Readings in Philippine History

Module 4, Lesson 10 – Taxation

Name: Date:
Course, Year and Section: Score:

A. True or False.
Write TRUE if the statement is correct and FALSE if it is incorrect.

_________1. Tax on business is a free collected tax from language such as getting a business
permit.

_________2. Barangay Clearance is a tax levied by the barangays on stores or retailers with
fixed business establishments.

_________3. Taxation is lying a tax through which the government generates expenses to defray
its income.

_________4. There are 12 types of taxes.

_________ 5. A tax is enforced as a contribution but it is not proportionate to the citizen’s ability
to pay.

_________6. Capital Gains tax is a tax imposed on gains that may have been realized by a buyer
from a seller.

_________7. Documentary stamp taxes are evident on documents like deed of sale.

_________8. Income tax is a tax on persons profits.

_________9. Professional Tax is an annual tax like licensure examinations.

_________10. Service fees charges collection with the regulation of barangay-owned properties.

Prepared by:
MA. TERESA S. GEVERO MPA, Ed.D