Lesson 15:
taxation
Learning Outcomes
> 1. Explain the nature and purpose of taxation
> 2. Identify the types of national and local taxes
> 3. Argue for or against a current taxation issue
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taxation
Laying a tax through which the government
generates income to defray its expenses.
Types of Taxes
National taxes
Local taxes
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National Taxes
Are the ones paid to the government
through the bureau of Internal Revenue.
Based on the National Internal Revenue
Code of 1997 or the Republic Act No. 8424
( Tax Reform Act of 1997) as amended.
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Types of National Taxes
1. Capital Gains Tax – 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.
2. Documentary Stamp Tax- a tax on document,
instruments. Loans, agreements, and papers evidencing the
acceptance, assignment, sale, or transfer of an obligations,
rights, or property incident thereto.
3. Donor’s Tax- is a tax on a donation or gift. A tax imposed
on the gratuitous transfer property between two or more
persons who are living at the time of the transfer.
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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 receipts do not exceed the amount
required to register as VAT-registered taxpayers.
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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 personal), or vendors of services.
8. Excise Tax- is a tax imposed on goods manufactured or
produced in the Philippines for domestic sale or consumption
or any other disposition. It also imposed on things that are
imported.
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.
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11. Final Withholding Tax- is a kind of withholding tax which
is prescribed only for certain payors and is 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.
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Local Taxes
> is based on the local government taxation in the
Philippines as stated in Republic Act 7160 or the
Local Government Code of 1991.
> These taxes, fees, or charges are imposed by the
local government units, such as provinces,
municipalities, and barangays.
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Types of Local Taxes
1. Tax on Transfer of Real Property Ownership- is imposed
on the sale, donation, barrier, o 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 within the territorial jurisdiction where the
franchise is selling in.
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4. Tax on Sand, Gravel, and other Quarry Resources- this
refers to the above materials that are extracted from public
lands or from the beds of seas, lakes, rivers, streams, creeks,
and other public water within its territorial jurisdiction.
5. Professional Tax- is an annual tax on each person engaged
in the exercise or practice of his her profession that requires
government examination, like licensure examinations.
6. Amusement Tax- is a tax collected from the proprietor,
lessees, or operators of theaters, cinemas, concert halls,
circuses, boxing stadia, and other places of amusement.
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7. Annual Fixed Tax for every delivery truck or van of manufacturers
or producers, wholesalers of, dealers , or retailers in certain products-
this type of tax is usually imposed as determined by the local provincial
councils through which the truck or trucks pass through or deliver cargo.
8. Tax on Business- is imposed by cities or municipalities on businesses
before they will be issued a business license or permit 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- this is to
impose regulations with regards to such weights and measures as
prescribed by the city, provincial, or municipal council.
10. Fishery, Rental 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.
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11. Community Tax- imposed on every corporation no matter
how created or organized, whether domestic or resident foreign,
engaged in or doing business in the Philippines .
12. Taxes- levied by the barangays on store or retailers with
fixed business establishments with gross- sales of receipts of the
preceding calendar year amounting to fifty thousands pesos
(50,000.00) or less.
13. Services fees- charges are fee or charges collected by the
barangays for services rendered in connections with the
regulations or the use of barangays owned properties or service
facilities.
14. Barangay Clearance- is a fee collected by barangays upon
issuance of barangay clearance, a document required for many
government transactions.
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Thank you!
