taxation module taxation module taxation module taxation module taxation module

2. WHY DO WE PAY TAX?

3. CAN A PERSON BE
EXEMPTED FROM
PAYING TAX?

4. Learning Outcomes:
• Explain the nature and purpose of taxation
• Identify the types of national and local taxes
• Argue for or against a current taxation issues.

5. Taxation in Philippine History
Pre-Colonial Period Spanish Colonization
Buwis/ Handog Cedula

6. What is TRAIN Law?
What is its purpose?

7. • The Tax Reform for Acceleration and InCLUSion (TRAIN) is the first
package in the Comprehensive Tax Reform Program. According to
the Government, TRAIN Law aims to make the tax system simpler,
fairer, and more efficient while also correcting some problems in the
tax system (Rosales, et.al. 2020) Some of the featURes of the TRAIN
Law incLUde:
TRAIN LAW

8. What is Taxation?
Taxation means laying a tax through which a government
generates income to defray its it’s expenses. It is a way to raise
funds for government programs and services that benefit the
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 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.

9. Types of Taxes
• There are two types of taxes: national and local. National
taxes are 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.

10. National Taxes: Local Taxes:
1. Capital Gains Tax 1. Community Tax
2. Documentary Stamp Tax 2. Barangay Clearance
3. Donor’s Tax 3. Professional Tax
4. Estate Tax 4. Amusement Tax
5. Income Tax 5. Tax on Business
6. Value Added Tax 6. Tax on Transfer of real
7. Excise Tax Property Ownership

11. National Taxes

12. 1. Capital Gains Tax
• A tax imposed to real properties
• 6%
• The seller has the responsibility
to file and pay the Capital Gains
Tax
2. Documentary Stamp Tax
• A tax on documents,
instruments, loan agreements,
and paper evidencing the
acceptance, etc.
• 1.5% of the selling price.
• The buyer pays for the DST.

13. 3. Donor’s Tax
• A tax on donation or gift.
• A tax imposed on the gratuitous
transfer of property between 2
or more persons living at the
time of the transfer.
• 6% tax = greater than 250,000
pesos a year.
4. Estate Tax
• A tax on the right of the
deceased person to transmit
his/her estate to lawful heirs and
beneficiaries at the time of the
death and on a certain transfers
which are made by law as
equivalent to testamentary
disposition.
• The heir is responsible in paying
the tax
• 6% more than 5M

14. 5. Income Tax
• A tax on all annual
profits made from
property ownership,
profession and
trades and offices.

15. 6. Value Added Tax
• A business tax imposed and
collected from the seller in the
course of trade or business.
• 12%
• It is an indirect tax, it can be
passed down to the buyer.

16. 7. Excise Tax
• A tax imposed on goods
manufactured or produced in
the Philippines for domestic sale
or consumption or any other
disposition. It is also imposed in
things that are imported.
• A legislated tax on specific goods
and services.
• Alcohol Products
• Tobacco Products
• Petroleum Products
• Miscellaneous Articles
Automobiles
Non essential goods
Non essential service
Sweetened Beverages

20. Local Taxes

21. 1. Community Tax
• A tax levied by cities or
municipalities to every Filipino
or Alien living in the Philippines,
18 years of age or over who has
been regularly employed or on a
wage salary, who is engaged in
business or occupation or who
owns real property…
2. Barangay Clearance
• A fee collected by barangays
upon the issuance of barangay
clearance.
• It is a document required for
many government transactions
such as getting a business permit
or when applying a job.

22. 3. Professional Tax
• An annual tax on each person
engaged in the exercise or
practice of his or her profession
that requires government
examination like licensure
examination.
• Php 300 pesos.
4.Amusement Tax
• A tax collected from the
proprietors, lessees, or
operators of theaters, cinemas,
concert halls, circuses, boxing
stadia, and other places of
amusement.
• 10%- boxing, cinema
• 18%- night/day clubs
• 15%-basketball games
• 30% racetracks

23. 5. Tax on Business
• A tax imposed by cities or
municipalities on business
before they will be issued a
business license or permits to
start operations.
• It varies from one city to
another.
6. Tax on Transfer of Real
Property Ownership
• A tax imposed on the sale,
donation, barter or any other
mode of transferring ownership
on real properties.

24. A Simplified exemption for income tax where taxpayers earning
250,000 Pesos or below anNUAL are exempted from paying income
tax.
Tax on lotto winnings and PCSO Prizes are taxed 20% of the prize or
winnings above P10,000
Donor’s tax was revamped to a flat rate of 6%-applicable for gifts
worth above P250,000 on the amoUNT in excess of P250,000.
Estate tax is a flat rate of 6% on the amoUnt in excess of P5 Million.
Estates with a net vaLUe below the amoUNT are exempted from tax.
Cosmetic SURgery tax at 5%. This includes surgery that is purely for
beautification or cosmetic purposes only.