WRITTEN REPORT

JOHN VINCENT Q. TUBANBSA-5A

KIND OF TAXES UNDER EXISTING LAWS

A. National Taxes
These are taxes imposed and collected by the national government
through the Bureau of Internal Revenue (BIR).
a. National Internal Revenue Code of 1997
The Republic Act No. 8424 otherwise known as the Tax Reform
Act of 1997, as amended. It covers the organization and function
of the Bureau of Internal Revenue (BIR). It sets out the power
and duties of the BIR and the powers and authorities of its
commissioner, regional directors, and revenue officers. The
largest content of the code pertains to the income tax. This
portion of the Act states the definitions, general principles, tax
rates, and computations of income tax on individual taxpayers,
corporations, estates, and trusts. It also prescribes the
accounting periods, methods of accounting, and other income
tax requirements that taxpayers should comply.
b. Tariffs and Customs Code of the Philippines
The law governing tariff and customs duties otherwise known as
Presidential Decree NO. 1464 which consolidated and codified
the tariff and customs laws in the Philippines. The office charged
with the administration and enforcement of the law is the
Bureau of Customs and Tariff Commission.
c. The Sugar Adjustment Act
Restricted agricultural production by paying farmers to reduce
crop area. Its purpose was to reduce crop surplus so as to
effectively raise the value of crops, thereby giving farmers
relative stability again.
d. The Narcotics Drug Act
An act to provide for the registration of, with the collector of
internal revenue, and the imposition of fixed and special taxes
upon all persons who produce, import, manufacture, compound,
deal in, dispense, sell, distribute, or give away opium,
marihuana, or any synthetic drugs.
e. The Special Education Fund Law
Otherwise known as Republic Act No. 5447, it consists of broad
requirements that mandate schools provide financial support
appropriate for public education.
f. The Travel Tax
The Travel Tax is a levy imposed by Philippine government on
individuals who are leaving the Philippines, whether Filipino
citizens or not, irrespective of the place where the air ticket is
issued and form or place of payment, as provided for by
Presidential Decree (PD) 1183.
g. The Private Motor Vehicle Act

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JOHN VINCENT Q. TUBANBSA-5A

h.

i.

j.
B. Local
a.

b.
c.

The provisions of this Act shall control, as far as they apply, the
registration and operation of motor vehicles and the licensing of
owners, dealers, conductors, drivers, and similar matters.
The Energy Taxes
Otherwise known as the Batas Pambansa Blg. 36, its purpose is
to impose an energy tax on electric power consumption and to
give businesses and consumers an incentive to use alternative
energy sources, such as solar and wind power, and to raise
revenue for the government in order to finance public spending.
Republic Act Nos. 1093; 1125; 2211
The RA No. 1093 (An Act to Punish Tax Evasion and Willful
Refusal to Pay Taxes By Aliens with Deportation), RA No. 1125
(An Act Creating The Court of Tax Appeals) and RA 2211 (An Act
Creating A Joint Legislative-Executive Tax Commission, Defining
Its Objectives, Powers And Functions, And For Other Purposes),
are laws imposed by the government which concerns about the
tax laws in the Philippines.
Presidential Decree No. 477
A presidential decree providing for the increase in capitalization
of rural banks.
Taxes
The Local Tax Code
Otherwise known as Republic Act No. 7160 or the Local
Government Code of 1991, as amended. These taxes, fees or
charges are imposed by the local government units, such as
provinces, cities, municipalities, and barangays, who have been
given the power to levy such taxes by the code.
The Real Property Tax Code
All real property in the province is assessed annually for taxation
purposes on the basis of its real and true value.
The Tax Ordinance of the respective barangay, municipality,
province.
These are taxes imposed by the barangay or the municipality or
province, in which each of it varies from place to place given
certain conditions. These taxes or laws needs to be approved by
the government before they get imposed to their respective
divisions.

DIFFERENT AUTHORITIES IMPOSING THE TAX IN THE PHILIPPINES

A. National Government
a. Bureau of Internal Revenue (BIR)
The Bureau of Internal Revenue shall be under the supervision
and control of the Department of Finance and its powers and
duties shall comprehend the assessment and collection of all
national internal revenue taxes, fees, and charges, and the
enforcement of all forfeitures, penalties, and fines connected

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JOHN VINCENT Q. TUBANBSA-5A

therewith, including the execution of judgments in all cases

decided in its favor by the Court of Tax Appeals and the ordinary
courts. The Bureau shall give effect to and administer the
supervisory and police powers conferred to it by this Code or
other laws.
b. Department of Finance (DOF)
It formulates revenue policies that will ensure funding of critical
government programs that promote welfare among our people
and accelerate economic growth and stability.
c. Court of Tax Appeals
Adjudication of tax, customs and assessment cases as defined in
the Courts mandate.
B. Municipal or Local Government
a. Collection of Local Revenues by Treasurer. - All local taxes, fees,
and charges shall be collected by the provincial, city, municipal, or
Barangay treasurer, or their duly authorized deputies. The provincial,
city or municipal treasurer may designate the Barangay treasurer as
his deputy to collect local taxes, fees, or charges. In case a bond is
required for the purpose, the provincial, city or municipal government
shall pay the premiums thereon in addition to the premiums of bond
that may be required under this Code.
b. Examination of Books of Accounts and Pertinent Records of
Businessmen by Local Treasurer. - The provincial, city, municipal or
Barangay treasurer may, by himself or through any of his municipal or
Barangay treasurer may, by himself or through any of his deputies duly
authorized in writing, examine the books, accounts, and other
pertinent records of nay person, partnership, corporation, or
association subject to local taxes, fees and charges in order to
ascertain, assess, and collect the correct amount of the tax, fee, or
charge. Such examination shall be made during regular business hours,
only once for every tax period, and shall be certified to by the
examining official. Such certificate shall be made of record in the books
of accounts of the taxpayer examined.
c. Local Government's Lien. - Local taxes, fees, charges and other
revenue constitute a lien, superior to all liens, charges or
encumbrances in favor of any person, enforceable by appropriate
administrative or judicial action, not only upon any property or rights
therein which may be subject to the lien but also upon property used in
business, occupation, practice of profession or calling, or exercise of
privilege with respect to which the lien is imposed. The lien may only
be extinguished upon full payment of the delinquent local taxes fees
and charges including related surcharges and interest.

CLASSIFICATION OF TAXPAYERS
A. Individual Taxpayer
1.)Resident Citizen

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JOHN VINCENT Q. TUBANBSA-5A

Income derived from sources w/n and w/o the Phil.

2.)Non-resident citizen
From income derived from sources within the Philippines; means a
Filipino citizen:
Establishes the satisfaction of the fact of his physical presence
abroad with a definite intention to reside therein;
Who leaves the Phil during the taxable year to reside abroad either
as an immigrant or for employment on a permanent basis;
Work and derives income abroad whose employment requires him
to be physically present abroad during taxable time
Previously considered as a non-resident and who arrived in the Phil
at anytime during taxable year to reside thereat permanently shall
be considered non-resident for the taxable year in which he arrives
in the Phil with respect to his income derived from sources abroad
until date of his arrival

3.)Resident alien
For income derived from sources within the Philippines
Means an individual whose residence is within the Phil and who is
not a citizen thereof
One who comes to the Phil from a definite purpose which in its
nature would require extended stay, and makes his home
permanently in the country becomes a resident alien
Length of stay is indicative of intention. An alien who shall have
stayed in the Phil for more than 1 year by the end of the calendar
year is a resident alien
4.)Non-resident alien / engaged in trade or business
GR: shall be subject to an income tax in the same manner as an
individual citizen and a resident alien individual, on taxable income
received all sources within the Philippines.
NOTE: a non-resident alien individual who shall come to the Philippines and
stay therein for an aggregate period of more than 180 days during any
calendar year shall be deemed a non-resident alien doing business in the
Philippines.
5.)Non-resident alien / not engaged in trade or business
The entire income received all sources within the Philippines by every
non-resident alien individual not engaged in trade or business within
the Philippines as interest, cash, rents, salaries, wages, premiums,
annuities, compensation, remuneration, emoluments, or other fixed or
determinable annual or periodic or casual gains, profits, and income,
and capital gains.
A tax equal to 25% of such income. Capital gains realized by a
non-resident alien individual not engaged in trade or business in the

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JOHN VINCENT Q. TUBANBSA-5A

Philippines the sale of shares of stock in any domestic corporation and

real property shall be subject to the income tax.
B. Corporate Taxpayer
A corporation shall include partnerships, no matter how created or
organized. Joint stock companies, joint accounts, associations, and
insurance companies
a. Domestic corporation / special corporation
It is created or organized in the Philippines or under its laws and
is liable for income derived from sources within and without.
b. Foreign corporation / resident foreign corporation
It is organized and existing under the laws of a foreign country,
which includes:
(a) Resident foreign corporation foreign corporation
engaged in trade or business within the Philippines and is liable
from sources within.
(b) Nonresident foreign corporation foreign corporation
not engaged in trade or business within the Philippines
C. General Professional Partnership
a. Established solely for purpose of exercising common profession and no
part of income derived from engaging in trade or business.
b. As an entity, it is not subject to income tax.
i. Partners are liable for income tax on their distributive share
(computed by dividing net income of GPP).
ii. Each partner shall report his distributive share as part of his
gross income.
iii. Individual partners are subject to regular income tax rate on
their taxable income
c. Taxable/Business/Ordinary/General Partnership:
i. All other partnerships no matter how created or organized.
ii. Includes unregistered joint ventures and business partnerships
iii. Taxable as an entity ordinary corporate income tax.
iv. Joint ventures are not taxable as corporations when its purpose
is: a) undertaking construction projects; b) engaged in
petroleum, coal and other energy operation under a service
contract with the government.
v. Partners are
considered
stockholders;
therefore, their
distributive share is taxed as dividends, thus subject to final
income tax on their gross distributive share.
D. Estate and Trusts
a. Estate:
property, rights and obligations of a person which are not
extinguished by his death and those that accrues thereto; taxed
in the same way as an individual provided it is irrevocable and
earns income; what is taxed is not the property that constitutes
the trust (this was already subject to donors tax) but the income
of such property.
b. Trust:
arrangement created by agreement under which title to property
is passed to another for conservation or investment with the
income and the corpus/principal distributed in accordance with

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JOHN VINCENT Q. TUBANBSA-5A

the directions of the creator; to be taxable as a TAXATION LAW

REVIEWER Page 21 of 165 separate entity, grantor must have
absolutely and irrevocably given up control and benefit over the
trust.