TAXATION 10.

ocupational licenses

Laying a tax through which the government generates In 1907, some provinces were authorized to double the
income to defray its expenses fee for the cedula to support the construction and
maintenance of the roads.
A way to raise funds for government programs and
services that benefit Filipino citizens The industrial tax was levied on the business
community according to their profitability.
Tax – enforced as a contribution but it is proportionate
to the citizen’s ability to pay In 1913, the Underwood-Simmons Tariff Act was
passed, resulting in a reduction in the revenue of the
Bureau of Internal Revenue government as export taxes levied on sugar, tobacco,
hemp, and copra were lifted.

Spanish Occupation In 1914, an income tax was introduced;

In 1919, an inherent tax was created;

“Buwis” (tribute), which could be paid in cash or kind,
with tobacco, chickens, produce, gold, blankets, and in 1932, a national lottery was established to
cotton, rice, or other products depending on the region create more revenue for the government
of the country were collected

Also there was a “bandala” (from the Tagalog word

“mandala”, a round stack of rice stalks to be threshed), Commonwealth period
an annual forced sale and requisitioning of goods such
In 1937, the cedula tax was abolished, which prepared
as rice.
to be a progressive move;
Later on, half of the tribute was paid in cash and the
But in 1940, a residence tax was imposed on very
rest with produce.
citizens aged 18 years old and on every corporation.
During the Galleon trade, force labor was a character
In 1939, the Commonwealth drafted the National
of Spanish colonial taxation and was required from the
Internal Revenue Code, introducing major changes in
Filipinos.
the new tax system as follows:
1884, The payment of tribute was put to a stop
1. The normal tax of three percent and the surtax
because of the “cedulla”
on income was replaced by a single tax and
Taxation in the Philippines during Spanish colonial progressive rate.
period was characterized by a heavy burden place. 2. Personal exemptions were reduced
3. Corporation income tax slight increased by
introducing taxes on inherited estates or gifts
donated in the name of the dead persons.
American Occupation
4. The culminative sales tax was replaced by a
From 1898 to 1903, the Americans followed the single turnover tax of 10% on luxuries.
Spanish system of taxation with some modifications 5. Taxes on liquors, cigarettes, forestry products
and mining were increased.
Later on, the Urban would be replaced by tax on real 6. Dividends were made taxable
state, which become known as land tax

The problem with the tax was that land titling in the
rural area was very disorderly Japanese Occupation

The Internal Revenue Law of 1904 (BIR) – was passed As World War II reached the Philippines shores,
as a reaction to the problems of collecting land ta. It economic activity put to stop and the Philippines
prescribed ten major sources of revenue: bowed a new administrators, the Japanese.

1. licensed taxes on firms dealing in alcoholic The expenditure of the Japanese military government
beverages and tobacco, grew greatly, and they issued military notes in order to
2. excise taxes on alcoholic beverages and cover the costs of war.
tobacco products,
3. taxes on banks and bankers,
4. Document stamp taxes
5. the cedula
6. taxes on insurance and insurance companies,
7. taxes on forest products,
8. mining concessions,
9. Taxes on business and manufacturing, and
 (1) make the tax system broad-based, simple, and with
Fiscal Policy from 1946 to Present reasonable tax rates; (2) minimize tax avoidance
allowed by existing flaws and loopholes in the system:
(3) encourage payments by increasing tax exemptions
Roxas Regime (1946-1948)
levels, lowering the highest tax rates, simplifying
He rejected the advised of the United Staes in tax procedure; and (4) rationalize the grant of tax
collection. incentives, which was estimated to be worth 531.7
billion pesos in 1994

The VAT base was also broadened in 1997 to include

Quirino Regime (1948-1953) services, through Republic Act 7716.
The impetus for economic growth came through the
implementation of import and exchange controls that
led to import substitution development. Estrada Regime (1998-2000)

Tax revenue in 1953 increased twofold compared to Implementation of the Economic Recovery Assistance
1948 Payment (ERAP) Program, which granted immunity
from audit and investigation to taxpayers who have
paid 20% more than the tax paid in 1997 for income
Magsaysay, Garcia & Macapagal Regime (1953- tax, VAT and/or percentage taxes.
1965) The Large Taxpayers Monitoring System was also
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) Arroyo Regime (2000-2010)

Indirect taxation still contributed to three quarters of tax She undertook increased government spending
revenues and the Omnibus Tax Law of 1969 did not without adjusting tax collections.
increase the ratio of income tax to general tax.
In 2005, the Expanded Value-Added Tax (E-VAT) was
signed into law as Republic Act 9337.

Marcos Regime (1965-1986) In February 2006, the VAT tax rate was also increased
from 10% to 12%.
Provided each tax payer Tax Account Number (TAN) in
1970 payer with a permanent not only facilitated the
identification of taxpayers but also resulted to faster
Noynoy Aquino Regime (2010-2016)
verification of tax records.
The Administration ventured into the adjustment of
During the Latter part of Marcos’ years (1981-1985),
excise tax on liquor and cigarette or the Sin Tax
the tax system was still heavily dependent on indirect
Reform made law by Republic Act 1035
taxes, which made up 70% of total tax collection.
It allows the increase the budget of the DOH and
Taxes grew at an average annual rate of 15% and
PhilHealth (from 55.2 million in 2012 to 515.4 million in
generated a low tax yield.
2015).

Aquino Regime (1986-1992)

Duterte Regime (2016-Present)
A major reform in the tax system introduced under the
Supported the implementation of the Tax Reform for
term Aquino was the introduction of the Value Added
Acceleration and Inclusion (TRAIN) law.
Tax (VAT). -She reformed the tax system through the
1986 Tax Reform Program. Vowed to lower income tax rates shouldered by
working Filipinos.
The VAT law was signed in 1986 and put to effect in
1988. -The tax reform of Aquino administration, both The proposed tax reform also seeks to limit VAT
tax and revenue effort rose, increasing from 10.7% to exceptions and increase excise tax on petroleum
15.4% in 1992. products and automobiles.

Ramos Regime (1992-1998)

The Ramos administration ventured into its own tax

reform program in 1997 through the Comprehensive
Tax Reform Program, which was implemented to:
 • R.A. No. 55 - provided security to tenants from
AGRARIAN REFORM arbitrary ejectment from the land they are cultivating

American Colonization Period

Third to Fifth Republic (QUIRINO)
• The colonial government tried to solve the agrarian
• E. O. No. 355-replaced the National Land Settlement
problem by purchasing the "friar lands" from religious
Administration to Land Settlement Development
corporations and selling them to tenants.
Corporation (LASEDECO)
• However, much of the land ended up with new
landlords who were mostly Filipinos

• Agrarian problem worsened and many tenants soon Third to Fifth Republic (MAGSAYSAY)
began to resort to armed means to "get back their • R.A. No. 1199 or Agricultural Tenancy Act of 1954 -
land" governed the tenant-landowner relationship by
organizing the share- tenancy and leasehold system;
• Tayug Uprising in Pangasinan (1931); Sakdalista
created Court of Agrarian Relations
Uprising (1935)
• R.A. No. 1400 (Land Reform Act of 1955) and R.A.
• Quezon's "social justice program" attempted to stop
No. 821 (Creation of Agricultural Credit Cooperative
the agrarian unrest in Central Luzon and alleviate the
Financing Administration)
poverty of the farmers
• R.A. 1400 created the Land Tenure Administration
(LTA) to handle the acquisition and distribution of large
tenanted rice and corn lands over 200 hectares for
individuals and 600 hectares for corporations
Commonwealth Era

• Quezon enacted some land reform laws during CP

Third to Fifth Republic (MACAPAGAL)
• Commonwealth Act. No. 178 (controls in the
landlord- • R.A. No. 3844 or Agricultural Land Reform Code -
tenant relationships) heavily favored tenant farmers; included abolition of
• He also created National Rice and Corn Corporation share tenancy and provided for the leasing of agrarian
(NARIC) in 1936 to control the prices of rice and corn lands to farmers; also set a retention limit of 75
hectares for landowners; invested rights of preemption
• Rural Program Administration office was created in and redemption for tenant farmers; put in place an
1939- mandated to facilitate the sale or lease of the administrative machinery for implementation;
haciendas to the tenants institutionalized a judicial system for agrarian cases;
and incorporated extension, marketing, and supervised
credit system of services for farmer beneficiaries

Third to Fifth Republic

• Agrarian problems still remained even after the

Philippine Independence in 1946 Third to Fifth Republic (MARCOS)
• Marcos declared the entire country a land reform
• Agrarian unrest became part of a full-blown revolt area through Presidential Decree No. 2
against the government
• R.A. No. 6389 or Code of Agrarian Reform - created
• HUKBALAHAP to Hukbong Mapagpalaya ng Bayan the Department of Agrarian Reform (DAR)
(People's Liberation Army)
• DAR was renamed Ministry of Agrarian Reform in
1978 under the parliamentary system
Third to Fifth Republic (ROXAS) • P.D. No. 27-provided for tenanted lands devoted to
• R.A. No. 34-established 70-30 sharing arrangements rice and corn to pass ownership to tenants, and
between landlord and tenants and regulated share- lowered the ceiling for landholding to 7 hectares
tenancy contracts
 Third to Fifth Republic (B. AQUINO)
Third to Fifth Republic (C. AQUINO) • Have not fared well
• R.A. No. 6657 or Comprehensive Agrarian Reform • a report by a NGO, the Focus on the Global South in
Law or CARL - offer lawful basis for the implementation 2013 showed a dismal performance by the DAR in
of the Comprehensive Agrarian Reform Program or land
CARP redistribution in spite of the promise by the government
• The program was deemed failure since Aquino was a
member of the Cojuangco family which owned one of
the largest haciendas in Luzon - Hacienda Luisita
Third to Fifth Republic (Duterte)
• Duterte directed the DAR to launch the 2nd phase of
Third to Fifth Republic (RAMOS) agrarian reform • Duterte reactivated the PARC
• R.A. No. 7905 - strengthened the implementation of (Presidential Agrarian Reform Council) on Sept. 12,
CARP 2016. The PARC immediately revoked stock
distribution option plans and agribusiness venture
• Limited the land conversion scheme by making arrangements, which ran counter to the provisions of
certain types of agricultural land as non-negotiable for agrarian reform laws.
conversion or highly-restricted to be converted
• Duterte focused on the distribution of Cloas
• R.A. No. 8532 or Agrarian Reform Fund Bill -
(Collective certificates of land ownership award) to
provided additional Php50B for CARP and extended its
agrarian reform beneficiaries (ARBs) nationwide.
implementation for 10 years
Education that works.
https:/national-u.edu.ph/

Third to Fifth Republic (ESTRADA)

• E.O. No. 151-consolidated small farm operations
into medium or large-scale enterprises to qualify for
long-term capital

• Ordered DAR to plan joint projects between private

investors and the agrarian sector under his
Magkabalikat Para sa Kaunlarang Agraryo or
MAGKASAKA program

Third to Fifth Republic (ARROYO)

• DAR was renamed twice: Department of Land
(2004) & DAR again (2005)

• E.O. NO. 456 instructed Department of land Reform

to revert its original names;

• R.A. No. 9700 extending CARP for another 5 years

beginning July 2009; allots Php150B for the acquisition
and distribution of 1.6 million hectares of land for 1.2
million beneficiaries and the provision of support
services for farmers