Taxation

Pre-colonial period

-Government – called barangay – ruler datu or raja

-Buwis / handug

Classes

-Tumao

-Timawa

-Oripun

-Priestly

Spanish Period

1 reales = 12.5 centavos

New income – generatings

-Manila – Acapulco galleon trade (1565 - 1815)

-Silver and slik

Polo Y Servicio (Forced Labor)

-evolved within the framework of the encomienda system

-Falla means one and a half reales

Bandala

-required native filipino farmers to sell their goods to the Spanish government

-mandala

Encomienda System (1570)

• A Compliance with the decree issued by King Philip II in 1558

• “Encomendero” – refer to the Spaniard that received a favor from the king

• The “Encomendero” was given the right to collect tributes from the inhabitants of the land
assigned to him.
 • The “Encomendero” required by law to perform the following:

• To give protection to the natives

• To help missionaries convert natives to Christianity

• To promote education

American & Japanese Regime

American Period (1898 – 1946)

Marcos Adminstration (1966-1986) 25 years president

• Presidential Decree No. 323 or Amending Section 21 and Section 51 of the National Internal
Revenue Code on October 26, 1973

• Presidential Decree No. 2006 or Amending Certain Sections of the National Internal Revenue
Code to Provide for Sale Tax on Subsequent Sales and to Simplify Tax AdministrationSeptember
21, 1972, The proclamation of Martial Law marked the advent of the New Society and ushered
in a new approach in the developmental efforts of the government.

• (1972-1980),Organization-wise, the Bureau had also undergone several changes during the
Martial Law period.

• Year 1977 that President Marcos promulgated the National Internal Revenue Code of 1977,
which updated the 1934 Tax Code.

Estrada Administration (1998-2001)

• Executive Order No. 159 or Declaring Mass Housing as Centerpiece Program of the Estrada
Administration and Constituting the Presidential Commission for Mass Housing

• Memoranda of Agreement were also forged with the league of local government units and
several private sector and professional organizations (i.e. MAP, TMAP, PCCI, FFCCCI, etc.) to help
the BIR implement tax campaign initiatives.

Arroyo Administration (2001-2010)

• The BIR’s thrust was to transform the agency to make it taxpayer-focused.

• 1) Reform the tax system to make it simpler and suit the Philippine culture

• 2) Reengineer the tax processes to make them simpler, more efficient and transparent

• 3) Restructure the BIR to give it financial and administrative flexibility

 • 4) Redesign the human resource policies, systems and procedures to transform the workforce to
be more responsive to taxpayers' needs.

Benigno III Aquino Administration (2010-2016)

• Following the highly-acclaimed inauguration of President Benigno C. Aquino III on June 30, 2010,
a former BIR Deputy Commissioner, Atty. Kim S. Jacinto-Henares, was appointed as the new
Commissioner of Internal Revenue. During her first few months in the BIR, Commissioner
Henares focused on the filing of tax evasion cases under the RATE Program, in compliance with
the SONA pronouncements of President Aquino.

Corazon Aquino Administration (1986-1992)

• February 1986, After the People's Revolution, a renewed thrust towards an effective tax
administration was pursued by the Bureau. "Operation: Walang Lagay" was launched to
promote the efficient and honest collection of taxes.

• 1988 , the advent of the value-added tax (VAT) in, a massive campaign program aimed to
promote and encourage compliance with the requirements of the VAT was launched.

Duterte Administration (2016 - Present)

• Republic Act (RA) No. 11213 or the Tax Amnesty Act was approved by Philippine President
Rodrigo Duterte on 14 February 2019

• Republic Act (RA) No. 10963 (Tax Reform for Acceleration and Inclusion) or TRAIN Law

Train Law

• Personal Income Tax

• Estate Tax

• Donors Tax

• Value Added Tax

• Excise Tax on Auto Mobiles

• Excise Tax on Petroleum Products

• Excise Tax on Sweetened Beverages

• Other Excise Taxes

THE PHILIPPINE CONSTITUTION

What is Philippine Constitution?

• The basic principles and laws of nation,state, or group that determines the powers and duties of
the government and guarantee the rights to the people.

• It identifies the limitations of the power of the government and enumerates the responsibilities
of the people.

MALOLOS CONSTITUION (1899)

• First Constitution of the Philippines

• Drafted after the Congress of the Aguinaldo Revolutionary Government

• September 15, 1898 at the Barasoain Church in Malolos, Bulacan

Three Initial Drafts Submitted for Consideration

1. The True Decalogue and Constitutional Program of Apolinario Mabini

2. The Pedro Paterno version

3. The Felipe Calderon version

• Debates and discussion lasted for a month (October 25,2898 to November 29,1898

• Majority of the arguments centered on the provision stipulating the separation of Church and
State

• December 1,1898 – President Aguinaldo returned it to the Congress for some amendments

• December 23,1898 – Prompted Aguinaldo to approve it

• January 21,1898 – promulgated after it was formally adopted by congress

1) The provision for an independent Republic of the Philippines consisting of three independent
powers distributed to the executive led by the president with a term of four years and not
eligible for re-election, a unicameral legislative, and the judicial

2) The Bill of Rights

3) The Separation of Church and State

• February 4,1899 – Philippine-American war broke out thus the Malolos Constitution was never
exercised
• March 23, 1901 – The downfall of the First Republic of the Philippines with the arrest of
President Aguinaldo

THE 1973 CONSTITUTION

• January 10-15, 1973 Marcos issued Presidential Decree No. 86.

• January 17, 1973, Marcos issued Proclamation No. 1102.

• Corazon Aquino taking oath over a provisional freedom constitution, issued presidential decree
no. 13.

THE 1987 CONSTITUTION

• February 11, 1987, the New Constitution was proclaimed ratified and in effect.

• It consists of 18 articles with a preamble.

Significant Provisions

• A presidential system of government restores the bicameral Congress of the Philippines.

• A modified Bill of Rights (Article 3) details the rights of every Filipino citizen.

• The creation of a Commission on Human Rights which, under Section 18, Article 8, is tasked to
investigate all forms of human rights violations involving civil and political rights.

• The Recognition of an Autonomous Region of Muslim Mindanao and the Cordilleras.

• Limited political autonomy for local government units and instructing the Congress to establish a
Local Government Code.

Provisions

• Preamble

• Article 1: National Territory

• Article 2: Declaration of Principles and State Policies

• Article 3: Bill of Rights

• Article 4: Citizenship

• Article 5: Suffrage

• Article 6: Legislative Department

• Article 7: Executive Department

• Article 8: Judicial Department

• Article 9: Constitutional Commissions

• Article 10: Local Government

• Article 11: Accountability of Public Officers

• Article 12: National Economy and Patrimony

• Article 13: Social Justice and Human Rights

• Article 14: Education, Science and Technology, Arts, Culture and Sports

• Article 15: The Family

• Article 16: General Provisions

• Article 17: Amendments and Revisions

• Article 18: Transitory Revisions

The Philippine Government is administered by a presidential system of government with a

bicameral legislature and an independent judiciary. It has three branches of government:

1. The executive headed by the President and Cabinet.

2. The legislative composed of the Senate headed by the Senate President and the House of
Representatives headed by the Speaker of the House.

3. The Judiciary composed of the Supreme Court headed by the Chief of Justice, and the lower
courts.

House of Representatives

- composed of congressmen/women (officially called as Representatives)

- 3 year term.

Senate

- composed of 24 senators.

- 6 year term.

Supreme Court

- Philippines’ highest judicial court.

- consists of 14 associate justices and chief justice.

AGRARIAN REFORM AND POLICIES

(quite related sa taxation but not so sure)

PRE-SPANISH PERIOD

• “This land is Ours God gave this land to us”

• Before the Spaniards came to the Philippines, Filipinos lived in villages or barangays ruled by
chiefs or datus.

• The datus comprised the nobility.

• Then came the maharlikas , aliping mamamahay, aliping saguiguilid.

SPANISH PERIOD

• “United we stand, divided we fall”

• When the Spaniards came to the Philippines, the concept of encomienda (Royal Land Grants)
was introduced.

• This system grants that Encomienderos must defend his encomienda from external attack.

• In turn, the encomiendero acquired the right to collect tribute from the indios (native).

AMERICAN PERIOD

- Philippine Bill of 1902

Private individual can own 16 hectares of land while the corporate land holdings can avail of
1,024 hectares.

- Land Registration Act of 1902 (Act No. 496)

Placed all private and public lands under Torrens system.

- Public Land Act of 1903

Introduced the homestead system in the Philippines
- Tenancy Act of 1933 (Act No. 4054 AND 4113)
Regulated Relationships between landowners and tenants of rice (50-50 sharing) and sugar cane
lands

COMMONWEALTH PERIOD
• “Government for the Filipinos”
• Significant legislation enacted during Commonwealth Period:
 • 1935 Constitution – "The promotion of social justice to ensure the well-being and economic
security of all people should be the concern of the State"
• Commonwealth Act No. 178 (An Amendment to Rice Tenancy Act No. 4045), Nov. 13, 1936 –
Provided for certain controls in the landlord-tenant relationships
• National Rice and Corn Corporation (NARIC), 1936 – Established the price of rice and corn
thereby help the poor tenants as well as consumers.
• Commonwealth Act. No. 461, 1937 – Specified reasons for the dismissal of tenants and only with
the approval of the Tenancy Division of the Department of Justice.
• Rural Program Administration, created March 2, 1939 – Provided the purchase and lease of
haciendas and their sale and lease to the tenants.
• Commonwealth Act No. 441 enacted on June 3, 1939 – Created the National Settlement
Administration with a capital stock of P20,000,000.

JAPANESE PERIOD

• “The Era of Hukbalahap”

• The Second World War II started in Europe in 1939 and in the Pacific in 1941.

• Hukbalahap controlled whole areas of Central Luzon

• Landlords who supported the Japanese lost their lands to peasants while those who supported
the Huks earned fixed rentals in favor of the tenants.

PHILIPPINE REPUBLIC

• “The New Republic”

• After the establishment of the Philippine Independence in 1946, the problems of land tenure
remained. These became worst in certain areas. Thus the Congress of the Philippines revised the
tenancy law.

PRESIDENT MANUEL A ROXAS (1946-1948)

• Republic Act No. 34 -- Established the 70-30 sharing arrangements and regulating share-tenancy
contracts.

• Republic Act No. 55 -- Provided for a more effective safeguard against arbitrary ejectment of
tenants.

ELPIDIO R. QUIRINO (1948 - 1953)

• Executive Order No. 355 issued on October 23, 1950

 • Replaced the National Land Settlement Administration with Land Settlement Development
Corporation (LASEDECO) which takes over the responsibilities of the Agricultural Machinery
Equipment Corporation and the Rice and Corn Production Administration.

RAMON MAGSAYSAY (1953 - 1957)

• Republic Act No. 1160 of 1954 -- Abolished the LASEDECO and established the National
Resettlement and Rehabilitation Administration (NARRA) to resettle dissidents and landless
farmers. It was particularly aimed at rebel returnees providing home lots and farmlands in
Palawan and Mindanao.

• Republic Act No. 1199 (Agricultural Tenancy Act of 1954) -- governed the relationship between
landowners and tenant farmers by organizing share-tenancy and leasehold system. The law
provided the security of tenure of tenants. It also created the Court of Agrarian Relations.

• Republic Act No. 1400 (Land Reform Act of 1955) -- Created the Land Tenure Administration
(LTA) which was responsible for the acquisition and distribution of large tenanted rice and corn
lands over 200 hectares for individuals and 600 hectares for corporations.

• Republic Act No. 821 (Creation of Agricultural Credit Cooperative Financing Administration) --
Provided small farmers and share tenants loans with low interest rates of six to eight percent.

CARLOS P. GARCIA (1957-1961)

- Continued the program of Pres. Magsaysay, No new Legislation Passed.

DIOSDADO P. MACAPAGAL (1961-1965)

• Republic Act No. 3844 of August 8, 1963 (Agricultural Land Reform Code)

• Abolished share tenancy, institutionalized leasehold, set retention limit at 75 hectares, invested
rights of preemption and redemption for tenant farmers, provided for an administrative
machinery for implementation, institutionalized a judicial system of agrarian cases

• Incorporated extension, marketing and supervised credit system of services of farmer

beneficiaries.

FERDINARD E. MARCOS (1965-1986)

• Proclamation No. 1081 on September 21, 1972 ushered the Period of the New Society. Five days
after the proclamation of Martial Law, the entire country was proclaimed a land reform area and
simultaneously the Agrarian Reform Program was decreed.
 • Republic Act No. 6389, (Code of Agrarian Reform) and RA No. 6390 of 1971 -- Created the
Department of Agrarian Reform and the Agrarian Reform Special Account Fund. It strengthen
the position of farmers and expanded the scope of agrarian reform.

• Presidential Decree No. 2, September 26, 1972 -- Declared the country under land reform
program. It enjoined all agencies and offices of the government to extend full cooperation and
assistance to the DAR. It also activated the Agrarian Reform Coordinating Council.

• Presidential Decree No. 27, October 21, 1972 -- Restricted land reform scope to tenanted rice
and corn lands and set the retention limit at 7 hectares.

CORY AQUINO

• The Constitution ratified by the Filipino people during the administration of President Corazon C.
Aquino provides under Section 21 under Article II that “The State shall promote comprehensive
rural development and agrarian reform.”

• On June 10, 1988, former President Corazon C. Aquino signed into law Republic Act No. 6657 or
otherwise known as the Comprehensive Agrarian Reform Law (CARL). The law became effective
on June 15, 1988.

• Executive Order No. 228, July 16, 1987 – Declared full ownership to qualified farmer-
beneficiaries covered by PD 27. It also determined the value remaining unvalued rice and corn
lands subject of PD 27 and provided for the manner of payment by the FBs and mode of
compensation to landowners.

• Executive Order No. 229, July 22, 1987 – Provided mechanism for the implementation of the
Comprehensive Agrarian Reform Program (CARP).

• Proclamation No. 131, July 22, 1987 – Instituted the CARP as a major program of the
government. It provided for a special fund known as the Agrarian Reform Fund (ARF), with an
initial amount of Php50 billion to cover the estimated cost of the program from 1987-1992.

• Executive Order No. 129-A, July 26, 1987 – streamlined and expanded the power and operations
of the DAR.

• Republic Act No. 6657, June 10, 1988 (Comprehensive Agrarian Reform Law) – An act which
became effective June 15, 1988 and instituted a comprehensive agrarian reform program to
promote social justice and industrialization providing the mechanism for its implementation and
for other purposes. This law is still the one being implemented at present.

• Executive Order No. 405, June 14, 1990 – Vested in the Land Bank of the Philippines the
responsibility to determine land valuation and compensation for all lands covered by CARP.

• Executive Order No. 407, June 14, 1990 – Accelerated the acquisition and distribution of
agricultural lands, pasture lands, fishponds, agro-forestry lands and other lands of the public
domain suitable for agriculture.
FIDEL RAMOS (1992-1998)

• When President Fidel V. Ramos formally took over in 1992, his administration came face to face
with publics who have lost confidence in the agrarian reform program. His administration
committed to the vision “Fairer, faster and more meaningful implementation of the Agrarian
Reform Program.

• Republic Act No. 7881, 1995 – Amended certain provisions of RA 6657 and exempted fishponds
and prawns from the coverage of CARP.

• Republic Act No. 7905, 1995 – Strengthened the implementation of the CARP.

• Executive Order No. 363, 1997 – Limits the type of lands that may be converted by setting
conditions under which limits the type of lands that may be converted by setting conditions
under which specific categories of agricultural land are either absolutely non-negotiable for
conversion or highly restricted for conversion.

• Republic Act No. 8435, 1997 (Agriculture and Fisheries Modernization Act AFMA) – Plugged the
legal loopholes in land use conversion.

• Republic Act 8532, 1998 (Agrarian Reform Fund Bill) – Provided an additional Php50 billion for
CARP and extended its implementation for another 10 years.

JOSEPH E. ESTRADA (1998-2000)

• “ERAP PARA SA MAHIRAP’. This was the battle cry that endeared President Joseph Estrada and
made him very popular during the 1998 presidential election.

• President Joseph E. Estrada initiated the enactment of the following law:

– Executive Order N0. 151, September 1999 (Farmer’s Trust Fund) – Allowed the voluntary
consolidation of small farm operation into medium and large scale integrated enterprise
that can access long-term capital.

GLORIA MACAPACAL ARROYO (2000-2010)

• The agrarian reform program under the Arroyo administration is anchored on the vision “To
make the countryside economically viable for the Filipino family by building partnership and
promoting social equity and new economic opportunities towards lasting peace and sustainable
rural development.”

• Land Tenure Improvement - DAR will remain vigorous in implementing land acquisition and
distribution component of CARP. The DAR will improve land tenure system through land
distribution and leasehold.
 • Provision of Support Services - CARP not only involves the distribution of lands but also included
package of support services which includes: credit assistance, extension services, irrigation
facilities, roads and bridges, marketing facilities and training and technical support programs.

• Infrastrucre Projects - DAR will transform the agrarian reform communities (ARCs), an area
focused and integrated delivery of support services, into rural economic zones that will help in
the creation of job opportunities in the countryside.

• KALAHI ARZone - The KALAHI Agrarian Reform (KAR) Zones were also launched. These zones
consists of one or more municipalities with concentration of ARC population to achieve greater
agro-productivity.

• Agrarian Justice - To help clear the backlog of agrarian cases, DAR will hire more paralegal
officers to support undermanned adjudicatory boards and introduce quota system to compel
adjudicators to work faster on agrarian reform cases. DAR will respect the rights of both farmers
and landowners.

BENIGNO AQUINO III (2010-2016)

• President Benigno Aquino III vowed during his 2012 State of the Nation Address that he would
complete before the end of his term the Comprehensive Agrarian Reform Program (CARP), the
centerpiece program of the administration of his mother, President Corazon Aquino.

• The younger Aquino distributed their family-owned Hacienda Luisita in Tarlac. Apart from the
said farm lots, he also promised to complete the distribution of privately-owned lands of
productive agricultural estates in the country that have escaped the coverage of the program.

• Under his administration, the Agrarian Reform Community Connectivity and Economic Support
Services (ARCCESS) project was created to contribute to the overall goal of rural poverty
reduction especially in agrarian reform areas.

• Agrarian Production Credit Program (APCP) provided credit support for crop production to
newly organized and existing agrarian reform beneficiaries’ organizations (ARBOs) and farmers’
organizations not qualified to avail themselves of loans under the regular credit windows of
banks.

• The legal case monitoring system (LCMS), a web-based legal system for recording and
monitoring various kinds of agrarian cases at the provincial, regional and central offices of the
DAR to ensure faster resolution and close monitoring of agrarian-related cases, was also
launched.

RODRIGO ROAD DUTERTE (2016 - PRESENT)

• Under his leadership, the President wants to pursue an “aggressive” land reform program that
would help alleviate the life of poor Filipino farmers by prioritizing the provision of support
services alongside land distribution.
• The President directed the DAR to launch the 2nd phase of agrarian reform where landless
farmers would be awarded with undistributed lands under the Comprehensive Agrarian Reform
Program (CARP).

• Duterte plans to place almost all public lands, including military reserves, under agrarian reform.

• The President also placed 400 hectares of agricultural lands in Boracay under CARP.

• Under his administration the DAR created an anti-corruption task force to investigate and
handle reports on alleged anomalous activities by officials and employees of the department.