Philippine Taxation System

Taxation System in the Philippines

By Ryan Jay SM. Cruz

Long before, the world has been run by the taxes collected by the government. It was in Egypt where this idea was first implemented. In the Philippines, the Spaniards (1521-1900) imposed systems which further developed the taxation system. According to Burdeos (2014), these systems include Manila-Acapulco Galleon Trade, Polo y Servicios, Bandala, Tribute and Encomienda System.

According to Artright (2010), “tax” is money paid by the people of a democratic nation to their government to sustain the national expenses. Taxes are collected by a government agency, which in our case is the Bureau of Internal Revenue (BIR), this agency is responsible in providing the capital for the construction

9337. Upon its approval by the Congress of the Philippines, the former 10 % VAT was retained however the President of the republic was given the stand-by authority to impose up to 12 % VAT on all things taxable considering the expanded coverage of the value added tax. Its main purpose is to raise revenue for the government to sustain all of its programs and projects. It also changed the way Filipinos were being taxed by the government, from being “consumption-type” taxation to “income-type”. Other taxes imposed to various energy industries like coal, petroleum and electricity were also lifted. In addition to that are the taxes paid for by professionals like doctors of medicines and lawyers. To date, E-VAT plays important role in the generation of national revenues. We will see receipts all over the market, malls or even in the restaurants where it imposition of the 12 % is clearly stated. Because of that, many things are covered in paying taxes to the

where they are required to pay an average of PhP 500.00 annually to the LGUs; (i) barangay tax usually paid by Sari-sari