taxation

• Taxes imposed by the Spanish in the Philippines
• 2 Reasons why Philippines were required to pay Taxes

  • As recognition of Spain's sovereignty over the colonies
  • To defray the expenses of pacification and governance
• Several colonial laws on taxation were made by the Real y Supremo Consejo de las Indias (Royal and Supreme Council of the Indies) for the Spanish Monarch
• A four-volume collection of laws relating to the Indies was published in Madrid in 1861
• These laws were embodied in the compilation of legislation related to the New World called the Recopilacion de leyes de los reynos de las Indias
• Tribute


  A general tax paid by Filipinos to Spain which amounted to eight (8) Reales
• Required to pay tribute


  • 18 to 50 yrs. old males
  • Carpenters, bricklayers, blacksmiths, tailors, and shoemakers
  • Town workers such as those in roads construction and those who's in public in nature
• Sanctorum


  A tax in the amount of 3 reales for the cost of Christianization includes: the construction of churches and the purchase of materials for religious celebrations
• Donativo


  A tax in the amount of half real for the military campaign of the government against the Muslims
• Caja de comunidad


  A tax collected in the amount of 1 real for the incurred expenses of the town construction of roads, repair of bridges, or the improvement of public buildings
• Servicio personal


  Also called a polo y servicios, a form of forced labor during the Spanish period in the Philippines
• Polista


  • All able-bodied males 16 to 60 yrs old were required to work in the construction of bridges, churches, and galleon ships
• Falla


  A fine that a polista could pay to be freed from forced labor
• Exempt from forced labor and falla


  • Gobernadorcillo, cabeza de barangay, and other members of the principalia
• Cagayan and Dingras revolts (1589) occurred on Luzon in the present-day provinces of Cagayan and Ilocos Norte
• Revolt of the Ilocanos, Ibanags and other Filipinos was triggered by the alleged abuses of the tax collectors including the collection of high taxes
• Agustin Sumuroy's revolt (1649-1650) was triggered when the town mayors sent the Warays to the shipyards in Cavite for forced labor
• Agustin Sumuroy's revolt spread to Cebu, Masbate, Camiguin, Bicol, Camarines, Albay, Zamboanga in Mindanao and Surigao
• Francisco Maniago's revolt (1660-1661) in Pampanga was against the tribute, forced labor and exploitation
• Andres Malong's revolt (1660-1661) in Pangasinan was coaxed by Maniago to revolt against the abuses of Spaniards
• Andres Malong proclaimed himself the king in the province of Pangasinan
• The Philippine tax system was reformed through the Tax Reform of 1884
• Two important provisions of the Tax Reform of 1884


  • Abolition of the hated tribute and its replacement of cedula tax
  • Reduction of the 40-day annual forced labor(polo) to 15days
• Cedulas personales


  First issued based on the Royal Decree on March 6, 1884, required all men and women residents of the Island who were over 18 yrs old to obtain a cedula
• Exceptions from obtaining cedulas


  • Chinese
  • Remontados d infieles
  • Natives and colonist of the archipelago of Jolo and of the Islands of Balabac and Palawan
• Cedula tax rates


  Ranged from 1.50 pesos to 25 pesos, and a tenth, gratis for priest, soldiers, and privileged classes
• Fiscal policy is used to adjust spending levels and tax rates to monitor and influence the nation's economy
• Two types of Fiscal Policy


  • Expansionary fiscal policy - designed to boost the economy
  • Contractionary fiscal policy - when the government either cuts spending or raises taxes
• The impact of World War 2 on the Philippines economy was effectively disparate, as Manila, the capital was razed to the ground while the rest of the Philippine was relatively untouched but the highly agriculture- based economy was disrupted
• President Manuel Roxas undertook increased government spending without adjusting tax collections, resulting in large deficits from 2002 - 2004
• Expanded Value-Added Tax (E-VAT)


  Signed into law as Republic Act 9337, expanded the VAT base, taxed selected professional services and increased the VAT tax rate from 10% to 12%
• The momentum for economic growth came during President Elpidio Quirino's time through the implementation of import and exchange controls that led to import substitution development
• Import and exchange controls


  A method of state intervention in the imports and exports of the country, so that the adverse balance of payments may be corrected
• Import Substitution Development


  A trade and economic policy which advocates replacing imports with domestic production
• Corporate Tax Rates


  A tax imposed on the net income of the company
• Presidents Magsaysay, Garcia, and Macapagal promised to study the tax structure and policy of the country through the creation of a Tax Commission in 1959 by means of Republic Act No. 2211
• The period of the post-war republic also saw a rise in corruption
• Indirect taxation


  A tax collected by an intermediary from the person who bears the ultimate economic burden of the tax
• Tax Revenue


  Defined as the revenues collected from taxes on income and profits, social security contributions, taxes levied in goods and services, payroll taxes, taxes on the ownership and transfer of property, and other taxes
• Collection of taxes remained poor, the tax structure was still problematic, and much of public funds were lost to corruption, which left the government incapable of funding projects geared toward development