National taxes

NATIONAL TAXES
A. INTRODUCTION
B. INCOME TAX
C. ESTATE TAX
D. DONOR’S TAX
E. VALUE-ADDED TAX
F. OTHER PERCENTAGE TAX
G. EXCISE TAX
H. DOCUMENTARY STAMP TAXES
I. CUSTOM DUTIES
J. TRAVEL TAX
K. ENERGY TAX
L. PRIVATE MOTOR VEHICLE TAX

A. INTRODUCTION
Kinds of Taxes under existing laws. They are:
 NATIONAL TAXES.

Those imposed by the National Government
under the National Internal Revenue Code and
other laws particularly the Tariff and Customs
Code.
 LOCAL TAXES.

Those imposed by local government to
meet particular needs under the Local Government
Code, such as real property tax and the community
tax (formerly residence tax).

KINDS OF NATIONAL INTERNAL
REVENUE TAXES
1.The following are deemed to be National
Internal Revenue Taxes:
a. income tax
b. estate and donor’s taxes
c. value-added tax
d. other percentages taxes
e. excise taxes on certain goods
f. documentary taxes
g. other taxes as are or hereafter may be
imposed and collected by the Bureau of Internal
Revenue.

KINDS OF NATIONAL INTERNAL
REVENUE TAXES

2. The following are, among others, the
National Taxes imposed by special laws:
a. custom duties
b. travel tax
c. energy tax
d. private motor vehicle tax

B. INCOME TAX
Income (for tax purposes) means all
wealth which flows into the taxpayer other than
as mere return on capital. So, not all receipts of a
person are income.

Income Tax is a tax on a person’s income,
profits and the like, realized in one taxable year.
It is imposed at progressive or gradual rates,
there being one set of schedule rates for
compensation or employment income, and for
business, professional and other types of non-
compensation income.

NATURE AND PURPOSE OF INCOME
TAX

It is generally regarded as a privilege tax
and not a tax on property. It is a tax on privilege
to earn an income . Its purpose is to raise
revenue.

GROSS INCOME
Gross income is all income but not
including exempt income and income subject to
final income tax.

 salaries or wages for services including fees,
commissions, and similar items and those
derived from business or profession, sale of and
other dealings in property, interests, rents,
dividends, and securities.

All kinds of income of whatever kind and
derived from whatever source including those
derived from gambling and illegal transactions
are taxable.

TAXABLE INCOME

Taxable Income is gross income as defined
above, less the deductions allowed by law,
including in the case of individuals, the allowable
personal and additional exemptions.

INCOMES SUBJECTS TO FINAL
INCOME TAX
Certain incomes (referred to as passive incomes)
are subject to final tax which shall be withheld by
the payor and paid by him to the Bureau of
Internal Revenue.

They are reported by the withholding agent
(payor) and paid by him to the BIR. Examples of
such incomes and their corresponding final rates
are:

1. Royalties (except from books, literary works
and musical compositions-10%) prizes; other
winnings; interests from bank deposits; yield or
other monetary benefit from deposit substitutes
(interest on money market placements); and
yield or other monetary benefit from trust funds
and similar arrangements-20%; Prizes amounting
to Php.10,000 or less are to be included in
taxable income and taxable accordingly.
Winnings from Philippine Charity Sweepstakes
and lotto are exempt from income tax; and

2. Cash and/or property dividends received from
a corporation.- 6%, 8%, and 10%, effective 1998,
1999, ad 2000, respectively.

3. Net capital gains from sale of shares of stock
not traded through the stock exchange- 5% on
the amount not exceeding Php.100,000, and
10% of any amount in excess of Php.100,000;
so if the net capital gains is Php.120,000, the
final tax is Php.7,000 (Php.5,000+Php.2,000).

4. Capital gains from sale or real property.- 6%
based on the gross selling price or current fair
market value, whichever is higher.

EXCLUSIONS FROM GROSS
INCOME

They are incomes that are exempt from the tax,
e.g., life insurance proceeds paid to beneficiaries
upon the death of the insured as they are
considered more as an indemnity rather than as
gains or profits, and payments for injuries or
sickness as they are compensatory in nature.

Other examples of exempt income are:

 retirement benefits (under certain conditions)
received from private firms,
 Social security and GSIS benefits,

 Prizes and awards granted in recognition of
religious, charitable, scientific, educational,
artistic literary or civic achievement, or in
sports competition.

Exclusions are not considered in determining
gross income. Deductions, on other hand, are
subtracted from gross income to arrive at taxable
(net) income.

DEFINITION OF DEDUCTIONS

Deductions are items or amounts which
the law allows to be deducted from gross income
to arrive at taxable income.

1. For Corporations and business (i.e., not
professional) partnerships, the itemized
deductions are:
 Ordinary and necessary trade, business or
professional expenses;
 Interests on indebtedness;
 Taxes;
 Losses;
 Bad debts;
 Depreciation;
 Depletion;
 Charitable and other contributions;
 Research and development expenditures; and
 Pension trust contributions of employees.

2. For compensation earners, no deductions are
allowed except only personal and additional
exemptions.

AMOUNTS OF PERSONAL AND ADDITIONAL
EXEMPTIONS ALLOWABLE TO INDIVIDUALS

There is allowed in the nature of a deduction
from the amount of taxable income, whether
compensation or not, the following basic
personal exemptions:

1. Php.20,000.00- for single individual or
married individual judicially decreed as legally
separated with no qualified dependents;
2. Php.32,000.00- for each married individuals
(husband or wife); or a total of Php.64,000 in
case both spouses earn income; and

3. Php.25,000- for an unmarried individual who
is the “head of the family” depending upon him
or her for support.

The additional exemption of Php.8,000 for
every child but not exceeding four (4)
dependents may be claimed by one of the
spouses in the case of married individuals.
NOTE: the Husband and wife shall compute their
individual income tax separately based on their
respective total taxable income. The resulting tax
due from both spouses shall be added and the tax
payable shall be the sum thereof.

DEFINITION AND SCOPE OF TERM
“HEAD OF THE FAMILY”
A head of the family is an individual who
actually supports and maintains in one
household, one or more individuals, who are
closely connected with him by blood
relationship, relationship by marriage, or by
adoption. A head of a family includes an
unmarried or legally separated man or woman
with:

1. One or both parents, or
2. One or more brothers or sisters, or
3. One or more legitimate, recognized natural,
or legally adopted children living with and
dependent upon him or her for their chief
support.

A recognized natural child is one who born
outside of wedlock between a man and a wife,
who, at the time of the conception of the child,
were legally free to marry each other, and is
recognized by one or both parents.

COMPUTATION OF INDIVIDUAL
INCOME TAX

1. Resident citizens- The formula for computing
the tax for resident citizens may be stated as
follows:

Gross income from all sources(within and/or
outside the Philippines
Less: Allowable (itemized) deductions or 10%
Optional standard deductions (OSD)
_______________________________________
= Net Income from all sources
Less: Personal and additional exemptions
_______________________________________
= Taxable income
Multiplied by: Graduated tax rate in
Sec.24(A) of the Tax Code
________________________________________
= Amount of income tax due and payable

2. Non-resident citizens and overseas contract
workers.
-The same computation exempt that only
income derived from sources within the
Philippines is taxable.

3. Resident Aliens
- the same computation as for non-
resident citizens.

4. Non-resident aliens.
- The tax is imposed also only on income
derived from sources within the Philippines.

a. If engaged in trade or business in the
Philippines, he is taxed in the same manner as
non-resident citizen or resident alien.
b. If not so engaged, the tax is equal to
25% of the entire or gross income (i.e., without
deduction) received.

c. If employed by regional or area
headquarters and regional operating
headquarters of multinational companies, or by
offshore banking units, or by foreign petroleum
service contractors or subcontractors, the tax is
15% of such gross compensation income. The
same rate applies to Filipinos employed and
occupying the same position.

INDIVIDUALS REQUIRED/NOT REQUIRED
TO FILE INCOME TAX RETURNS
The tax return is the sworn statement
wherein the taxpayer states the facts as to the
nature and extent of his tax liability for the taxable
year.

1. Under the law, the following individuals
are required to file an income tax return:

a. Every resident citizen regardless of
the source of his income, within or outside the
Philippines;

b. Every non-resident and resident alien,
as their income from sources within the
Philippines; and

c. Every non-resident alien engaged in
trade business or in the exercise of his profession
in the Philippines, as to his income from sources
within the Philippines.

2. The following individuals are not required to
file an income tax return:

a. An individual whose gross income does
not exceed to his total personal and additional
exemptions for dependents, except if engaged in
business or practice of profession, regardless of
the amount of gross income.

b. An individual earning from a single employer
pure compensation income not exceeding
Php.60,000, the income tax on which has
already been correctly withheld by the employer,
are no longer required to file the annual income
tax returns; hence, the following are not
exempted:

1. Those who do not derive income purely
from compensation;
2. Those whose pure compensation
income for the taxable year exceeds
Php.60,000; and

3. Those deriving compensation income
concurrently from two or more employers at
any time during the taxable year even if it does
not exceed Php.60,000.

c. An individual whose income consists solely of
interest, prizes, royalties, etc. subject to final
income tax which is required to be withheld by
the payor and paid by him to the Bureau of
Internal Revenue; and

d. An individual who is exempt from tax under
the Tax Code or other laws.

FILING OF RETURN AND
PAYMENT OF TAX
1. When- the individual income tax return
covering income of the preceding taxable
year must be filed in duplicate on or before
April 15 of each year or, in meritorious cases,
within the extension which may be granted
by the Commissioner of Internal Revenue.

PAYMENT OF TAX
2. Where- Except in the cases where the
Commissioner of Internal Revenue otherwise
permits, it must be filed with the;
 revenue district office,

 Revenue collection officer,

 An authorized agent bank, or

 Duly authorized treasurer of the city or
municipality or where such person has his legal
residence or principal place of business in the
Philippines; otherwise,
 With the office of Commissioner of Internal
Revenue.

PAYMENT OF TAX
3. By Whom- By the following persons:
a. A resident citizen
b. A non-resident citizen
c. A resident alien
d. A non-resident alien

The income tax is paid at the time the
return is filed. This is called the “pay-as-you-file”
system.

C. ESTATE TAX
Estate Tax is a tax on the right of the
deceased person to transmit his lawful heirs or
beneficiaries.

Inheritance Tax is a tax on the right of the
heirs or beneficiaries to receive the estate of the
deceased person. It is no longer imposed.

NATURE OF ESTATE AND
INHERITANCE TAXES

They are not direct taxes on property, nor are
they a capitation tax; that is, the tax is laid
neither on the property, nor on the transferor or
the transferee. In other words, they are privilege
taxes.

PURPOSE OF THE TAX

The estate and inheritance taxes are two (2)
types of death taxes. They are imposed at high
rates to help reduce undue concentration of
wealth in society to which the receipt of the
inheritance is a contributing factor. Their
imposition conforms to the widely accepted
principle of ability to pay.

NET ESTATE

Net estate means gross estate less allowable
deductions and specific exemptions. “Specific
Exemptions” are those which are declared by law
as expressly exempt from the tax such as
bequests to charitable institutions, subject to
certain conditions.

TAX IMPOSED ON NET STATE

The estate tax is imposed upon the basis of the
net estate considered as a unit computed in
accordance with the exempt. Thus, if the value
of the estate is Php.500,000, only
Php.300,000 is subject to estate tax.

DEDUCTIONS FROM THE GROSS
ESTATE
The allowable deductions consist of the
amounts permitted by law to be deducted from
the value of the gross estate which include,
among others, funeral, judicial and medical
expenses, losses, indebtedness, and taxes, an
amount equivalent to the value of decedent’s
family home not exceeding Php.1,000,000,
standard deduction equivalent to
Php.1,000,000 and the amount of all transfers
to or for the use of the Government or any
political subdivision thereof.

FILING OF RETURN AD PAYMENT OF
TAX
1. When.- Where the gross value of the estate
exceeds Php.20,000, an estate tax return
must be filed within six (6) months from the
decedent’s death and the tax due thereon
paid at the same time.

2. Where.- Except in cases where the
Commission of Internal Revenue otherwise
permits, with;

FILING OF RETURN AD PAYMENT
OF TAX

 The revenue district officer,

 Revenue collection officer, or

municipality where the decedent or deceased
person was residing at the time of his death, or
 If he was a non-resident, with the Office of the
Commissioner.

D. DONOR’S TAX

Donation is an act of liberality whereby a
person disposes gratuitously of a thing or right
in favor of another who accepts it.

DONATION NOT SUBJECT TO
DONOR’S TAX
Donation is:

 Inter vivos, if made between living persons, to
take during the lifetime of the donor, and

 Mortis causa, if made in the nature of
testamentary disposition, that is, it shall take
effect upon the death of the donor.

The latter kind of donation is subject to estate
tax.

GIFT TAX
Gift Tax is a tax imposed on the transfer
without consideration of property or money
between two or more persons who are living at
the time the transfer is made.

KINDS :

 Donor’s tax or the tax levied on the act of
giving; and
 Donee's tax or the tax levied on the act of
receiving.

NATURE OF GIFT TAX
The gift tax is a privilege tax. It is a tax on
the privilege of the donor to give or on the
privilege of the donee to receive.

Note that the tax is imposed without reference
to the death of the donor.

PURPOSE OF THE TAX
1. The gift tax is intended to supplement the
estate and inheritance taxes by preventing
their avoidance by those who give away
property and money in anticipation of death,
through the taxation of gifts inter vivos
without which, the property would be subject
to the said taxes. Thus, whether the transfer
takes place during life or death, the burden of
taxation would be about the same.

PURPOSE OF THE TAX

2. The gift tax is also intended to prevent the
avoidance of income tax through the device
of splitting income among numerous donees
with the donor thereby escaping of the
progressive rates of income taxation.

NET GIFT

Net gift means the total amount of gifts
less the allowable deductions and specific
exemptions provided by law.

TAX IMPOSED ON THE NET GIFT
The donor’s tax is computed upon the
basis of the total net gifts made during the
calendar year, in accordance with the schedule
provided by law.

Net gifts of the amount of Php.100,000
or less are exempt. Thus, if the value of the net
gift is Php.150,000, only Php.50,000 is subject
to donor’s tax.

FILING OF RETURN AND PAYMENT
TAX
1. When.- The donor’s tax return must be filed
within 30 days after the gift is made and the
tax due thereon paid at the same time.

2. Where.- Except in the cases where the
Commissioner of Internal Revenue otherwise
permits, it must be filed with;



municipality where the donor was residing at
the time of the donation, or
 If he is a non-resident, with the Office of the
Commissioner.

E. VALUE-ADDED TAX
Value-added tax (VAT) is a percentage tax
imposed on every sale, barter, exchange, or lease
of goods or properties (real or personal) or sale
of services in the course of trade or business, and
on every importation of goods, whether or not
in the course of trade or business, based on the
gross selling price or value, or the gross receipts,
payable by the seller, transferor, lessor, or
importer,

NATURE OF THE TAX
It is a tax not on goods, properties, or
services as such, but on the sale, barter,
exchange, or lease of goods or properties, or
performance of service for a consideration, or on
the importation of goods. It is, therefore, a
privilege tax.

TRANSACTIONS SUBJECT TO THE
TAX
Except those specifically exempted by law, VAT
applies

1. Every sale of goods or properties, or
importation of goods; and

2. Every sale of service (which include lease of
property) other than services rendered by
persons subject to “other percentage taxes”
under the tax code.

Barter or exchange is considered by law as
a sale. The importation of goods may be for
business purpose or for the personal use or
consumption of the taxpayer. But the sale of
goods, properties, or services must be in the
course of trade or business to be subject to VAT.

RATES BASES OF THE TAX
1. Sale of goods or properties.

2. Importation of goods.

3. Sale of services.

1. Sale of goods or properties.
- The tax is 10% of the gross selling price
or gross value in money of the goods or
properties sold or bartered.
Gross selling price is the total amount of
money or its equivalent which the purchaser
pays or is obligated to pay the seller. Certain
sales are exempt from the tax.

2. Importation of goods.
- The tax is 10% of the total value used by
the Bureau of Customs in determining customs
duties to which value shall be added the duties,
excise taxes, and other charges due on such
goods. Certain importations are exempt from
the tax.

3. Sale of services.
- the tax is 10% of the gross receipts
derived by any person (e.g., broker) engaged in
the performance of service for others for a fee or
consideration. Certain services are exempt from
the tax.
Gross receipts mean the total amount of
money or its equivalent representing the
contract price or fee for the service performed or
to be performed for another person.

TAX APPLIES ONLY TO VALUE
ADDED BY SELLER
Under the tax credit method for
computing and collecting VAT, the taxpayer
pays only the difference between the tax on his
sales (output tax) and the tax on his purchases
(or importation) of goods (for sale or
conversion into other finished goods, or for use
in the business), supplies, and materials, and
services (input tax).

PAYMENT OF TAX

1. When.- The quarterly value-added tax return
of gross sales or gross receipts for every
quarter must be filed within 25 days
following the end of each quarter. VAT-
registered person shall pay the tax on a
monthly basis.

PAYMENT OF TAX
2. Where.- The quarterly return must e filed
with and the tax paid to a:

 Duly authorized agent bank or
 The revenue district officer;

 Revenue collection officer; or

municipality where the taxpayer is registered as
a VAT-registered person or required to
register.

F. OTHER PERCENTAGE TAXES
Percentage taxes are taxes based on a
certain percentage of the gross selling price or
gross value in money of goods sold, bartered,
exchanged, or imported, or gross receipts or
earnings derived by a person engaged in the sale
of services.

NOTE: Value-added tax is a kind of percentage
tax. Services rendered by a person subject to the
“other percentages taxes” imposed by the Tax
Code are not subject to the value-added tax.

PERSONS OR BUSINESS SUBJECT TO AND
RATES OF OTHER PERCENTAGE TAXES
1. Small business enterprises, i.e., those whose
annual gross sales and/or receipts do not
exceed Php.550,000,- 3% of gross quarterly
sales or receipts.

2. Domestic carriers by land, air or water and
transport passengers for hire, and keepers of
garages- 3% of gross receipts.

3. International carriers, air or shipping, doing
business in the Philippines.- 3% of their gross
quarterly receipts.

4. Franchise holders or grantees in respect to
franchises on radio and/or television
broadcasting companies whose annual gross
receipts of the preceding year do not exceed
Php.10 million,- 3% of gross receipts, and on
electric, gas, and water utilities- 2%.

5. Senders of overseas messages.- 10% of the
amount paid for the service.

6. Life insurance companies.- 5% of gross
premium collected.

7. Proprietors, lessees or operators of amusement
places.- 15%, 18%, or 30% of gross receipts.

8. Sale of shares of stock.- ½ of 1% (0.05), 4%,
2%, and 1% of gross selling price or gross value
of the shares.
NOTE: Banks and Finance companies are also
subject to percentage taxes until December 31,1999
when they shall be subject to value-added tax,
unless otherwise provided by Congress.

OVERSEAS COMMUNICATION
TAX

The tax is imposed upon every overseas dispatch
message or conversation transmitted from the
Philippines by telephone, telewriter exchange,
wireless and other communication services
equivalent to 10% on the amount paid for such
services payable by the person paying for the
services rendered.

TAX ON RECEIPTS OF LIFE
INSURANCE COMPANIES

The tax is imposed on persons, companies or
corporations engaged in insurance business in
the Philippines equivalent to 2% of the total
premiums collected. Certain premiums
mentioned by law are not included in the taxable
receipts.

The law exempts from the tax purely cooperative
companies or associations defined as those as are
conducted by the members thereof with the
money collected from among themselves and
solely for their own protection and not for
profit. Agents of non-resident foreign insurance
companies shall pay a tax equal to 10% of the
total premiums received.

AMUSEMENT TAXES
1. Taxes on gross receipts.
Taxes equivalent to 18% of the gross
receipts of cockpits, cabarets, and day or night
clubs; 10% in the case of boxing exhibitions; 15%
in the case of professional basketball games; and
30% in the case of race tracks and jai-alai,
irrespective of whether or not any amount is
charged or pay for admission, collected from
every proprietor, lessee, or operator of such
establishment .

AMUSEMENT TAXES
2. Taxes on winnings.
Taxes imposed on every person who wins
in a horse race or jai-alai equivalent to 10% of his
winnings or “dividends”. The same tax is
collected from the owners of winning race
horses.

The amusement tax on admission to places of
amusement is now levied and collected by the
provinces and cities to the exclusion of national
government.

TAX ON SALE OF SHARES OF
STOCK

1. Shares of stock listed and traded through the
local stock exchange.

The tax is ½ of 1% (0.05) based on the
gross selling price or gross value in money of the
shares other than the sale by a dealer in securities
(i.e., one regularly engaged in selling securities
like stocks, as a business).

TAX ON SALE OF SHARES OF
STOCK
2. Shares of stock sold through initial public
offering in closely held corporations.
This is also based on the gross selling price
or gross value in money of the shares, in
accordance with the proportion of the shares
sold to the total outstanding shares after the
listing in the local stock exchange at rates
provided below:
Up to 25%.................................... 4%
over 25% up to 33 1/3%............... 2%
over 33 1/3%................................. 1%

FILING AND PAYMENT OF THE
TAXES

1. When.- The percentage tax return of gross
sales, receipts or earnings for every quarter
must be filed and the tax due thereon paid
within 25 days after the end of each taxable
quarter.

FILING AND PAYMENT OF THE
TAXES
2. Where.- The quarterly return must be filed
with and the tax paid to:


 Revenue collection officer or

municipality where the business or principal
place of business of the taxpayer is located.

The taxpayer may file a separate return for
each branch or place of business or a
consolidated return for all branches or places of
business.

G. EXCISE TAX
Excise Tax, as used in the Tax Code, are
taxes imposed on certain specified goods
manufactured or produced in the Philippines for
domestic sale or consumption or for any other
disposition and on goods imported into the
Philippines.

NOTE: When classifying taxes according to
subject matter of object, the term “excise tax” or
“privilege tax” is used to refer to a tax other than
personal tax and property tax.

NATURE OF EXCISE TAX
Excise Taxes subject directly the produce
or goods to tax. They are, therefore, taxes on
property.

KINDS OF EXCISE TAXES
1. Specific Tax.
one imposed and based on weight, volume
capacity, length, number, or any other physical
unit.

2. Ad valorem tax.
one imposed and based on selling price or
other specified value of the article.

GOODS SUBJECT TO EXCISE TAXES
1. In General - Excise Taxes apply:

a. To goods manufactured or produced in
the Philippines for domestic use or
consumption or for any other disposition;
and

b. To goods imported from foreign
countries.

2. In Particular – The Tax Code enumerates the
goods subject to excise taxes, namely:

a. Alcohol products
b. Tobacco products
c. Petroleum products
d. Miscellaneous goods
e. Mineral products

PAYMENT OF THE TAXES
1. When - Unless otherwise specifically allowed
the return shall be filed and the excise tax due
shall be paid by the manufacturer or
producer before removal of domestic
products from the place of production. In the
case of imported articles, the tax shall be paid
by the owner or importer before release from
the customs house, or by the non-exempt
person in possession of the tax-exempt
articles.

PAYMENT OF THE TAXES
2. Where – Except as the Commissioner of
Internal Revenue otherwise permits the
return shall be filed with and the tax to:

 Any authorized agent bank or
 Revenue Collection officer,

municipality where the taxpayer has his/its
legal residence or principal place of business.

H. DOCUMENTARY STAMP TAXES

Documentary Stamp Taxes is a tax on
documents, and papers evidencing the
acceptance, assignment, sale or transfer of an
obligation, right or property incident thereto.

NATURE AND PURPOSE OF THE
TAX
It is a privilege tax because it is really
imposed on transaction rather than on
document. The document is only taxed because
of the transaction.
The purpose of the law in imposing stamp
taxes is to raise revenue, and not to invalidate
the contract.

EFFECT OF FAILURE TO STAMP
TAXABLE DOCUMENT
Such failure does not render the document
invalid or void. But in such case, the following
shall be the effects:

1. The document shall not be recorded or
registered;
2. Such document or any record or transfer of
the same shall not be admitted or used in
evidence in any court until the requisite
stamp or stamps shall have been affixed
thereon and cancelled.

EFFECT OF FAILURE TO STAMP
TAXABLE DOCUMENT
3. No notary public or other officer authorized
to administer oaths shall add his jurat or
acknowledgement until the document is
properly stamped; and

4. The person who fails to affix the proper
documentary stamps shall, for every
violation, be liable in addition to the amount
of tax required to be paid, an amount
equivalent to 25% of such unpaid amount.

PAYMENT OF THE TAX
1. By whom payable – The tax is payable by the
person making, signing, issuing, accepting or
transferring such obligation, right or
property.

2. When payable – The tax return shall be filed
and the tax due shall be paid within 10 days
after the close of the month when the taxable
document was made, signed, issued, accepted
or transferred.

PAYMENT OF THE TAX
3. Where payable – The tax return shall be filed
with and the tax shall be paid through:

 The authorized agent Bank, or the Revenue
district officer;

municipality where the taxpayer has his/its
legal residence or principal place of business.

DOCUMENTS SUBJECT TO THE DOCUMENTS NOT SUBJECT TO THE
TAX TAX
1. Debentures and certificates of 1. Insurance policies or annuities to
indebtedness; members of fraternal societies;

2. Original issue of shares and 2. Certificates of oath administered to
stock; and certificates of acknowledgement by
any government official in his official
3. Sales contracts or agreements;
capacity;
3. Statements and compulsory
4. Bonds, loan agreements,
information required by government
promissory notes and bills of
offices for statistical purposes and not
exchange;
for the benefit of the person filing the
5. Insurance policies; same;
4. Affidavits of poor persons for the
purpose proving property; and
6. Powers of attorney;
5. Certificates of the assessed value of
7. Leases, mortgages, and pledges. lands not exceeding Php.200.00 in
assessed value, furnished to applicants
for registration of title to land.

I. CUSTOM DUTIES
Custom Duties are taxes levied by a
government on the importation or exportation
of goods in or out of the country.

Tariff, on the other hand, means a book of
rates; a schedule of fees imposed into a country.

GOVERNING LAW AND
ADMINISTRATIVE OFFICES
The law governing tariff and customs
duties is Presidential Decree No. 1464, otherwise
known as the Tariff and Customs Code of 1978
which consolidated and codified the tariff and
customs law in the Philippines.
the offices charged with the administration
and enforcement of the law are the Bureau of
Customs and the Tariff Commission.

CLASSIFICATION OF CUSTOM
DUTIES
1. Ordinary or regular custom duties,
imposed and collected mainly as a source
of revenue, namely:
a. specific
b. ad valorem

2. Special custom duties,
imposed and collected in addition to the
ordinary customs duties usually to protect local
industries from unfair competition.

KINDS OF SPECIAL CUSTOMS
DUTIES
1. Dumping duty- imposed on certain imported
articles which are being sold or are likely to
be sold at a price lower than their home
market price and which may injure or retard
the establishment of an industry producing
like goods in the Philippines.

2. Countervailing duty- imposed on articles,
upon the production, manufacture, or export
which any bounty or subsidy is granted in
the country of origin.

KINDS OF SPECIAL CUSTOMS
DUTIES
3. Marking duty- imposed on imported articles
and containers which have not been properly
marked in any official language of the
Philippines as to indicate the name of the
country of origin of the article.

4. Retaliatory or discriminatory duty- imposed
upon articles of foreign country which
discriminates against Philippine Commerce.

J. TRAVEL TAX
PURPOSE:

The law was promulgated in line with “the
policy of the Government to lessen the
restriction on foreign travel”, “simplify travel
regulations”, and at the same time, “to provide
adequate funds for Government programs.”

PERSONS LIABLE
1. All Filipino citizens;

2. Permanent resident aliens; and

3. Non-immigrant ant aliens who have stayed
in the Philippines for more than one year and
are leaving the country, irrespective of the
plane of issuance of ticket and the form and
place of payment.
SCHEDULE OF THE TAX
1. Php.2,700.00

2. Php.1,620.00

3. Php.1,350.00 (for first class passage) and
Php.810.00 (for economy class passage)

PERSONS EXEMPTED
Among others, the following may be
mentioned;

 Foreign diplomatic and consular officials;
 Crew members of ships and airplanes flying
international routes;
 Infants who are two years old or less;

 Filipino overseas contract workers, officials, etc. of
the United Nations Organization and its agencies
 Non-resident Filipino citizens;

 Bona fide students with government-approved
scholarships, etc.

K. ENERGY TAX
PURPOSE:

The tax is imposed in view of:
1) The need to discourage the uneconomic
consumption of fuel and
2) The need for additional revenue to support
economic development.

The imposition is also in line with the
Government’s energy and fuel conservation
programs.

BASES OF THE TAX
1. On aircraft – The tax is imposed on non-
commercial helicopters and non-commercial
fixed winged aircraft based on their gross
weight in kilos.

2. On watercraft – The tax is imposed on
motorized speedboats, yachts, launches, and
other watercrafts based on the length of the
vessel.

BASES OF THE TAX
3. On electric power consumption - The tax is
imposed on the monthly electric power
consumption of every residential customer
of electric power utilities determined in
accordance with the following schedule:
MONTHLY KILOWATT-HOURS THA TAX SHALL BE
CONSUMPTION
Not over 650 Exempt

Over 650 but not over 1,000 Php.0.10 per KHW in excess of 1,000

Over 1,000 but not over 1,500 Php.35.00 plus Php.0.20 per KHW in
excess of 1,000
Over 1,500 Php.135.00 plus Php.0.35 per KHW in
excess of 1,500

In areas outside Metro Manila where the
prevailing electric power rates (excluding the
energy tax) are equal to or higher than the rates
(including the energy tax) prevailing in Metro
Manila, the energy tax shall not apply; if less,
then the energy tax to be imposed in the former
shall be equal to the difference or the full
amount of the energy tax, whichever s lower.

L. PRIVATE MOTOR VEHICLES TAX
PURPOSE

This tax is imposed by Executive Order
No.43 which amended R.A. No. 4136, otherwise
known as the “Land Transportation and Traffic
Code,” as amended. The law was issued to
rationalize the structure of the tax on private
motor vehicles by basing the same on ability to
pay of the owners thereof.

SCHEDULE OF THE TAX
VEHICULAR TYPE
Vehicle Light Medium Heavy Utility
(0-601cc) (1601cc- (2801cc & (2700kg.
2800cc) Over) GW & below)

Age
Current
1 years old Php.1,000 Php.3,000 Php.6,000 Php.1,000
2 years old 1,000 3,000 6,000 1,000
3 years old 1,000 3,000 6,000 1,000
4 years old 1,000 2,400 6,000 1,000
5 years old 1,000 2,400 6,000 1,000
Over 5 years 700 1,200 2,800 900
old

PREPARED BY:

VICENTE, REYNEBERT B.
BSEII-SST

National taxes

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