TAXATION UNDER THE AMERICANS AND TAXATION DURING THE COMMONWEALTH PERIOD

Summary

The video script explores the evolution of the taxation system in the Philippines, highlighting its transformation from Spanish rule to American governance and then under the Commonwealth period. It emphasizes the compulsory nature of taxation and its role in financing public services such as schools, roads, and hospitals. The American period introduced significant tax reforms, including excise taxes on harmful goods and various business taxes. During the Commonwealth period, the system became more progressive, with adjustments to income taxes and corporate taxes. The script also touches on the impact of taxation during World War II under Japanese rule.

Takeaways

• 😀 Taxation is the compulsory money collection by the government to finance public services like schools, roads, and healthcare.
• 😀 The taxation system in the Philippines evolved from the Spanish period to the American period, with various changes aimed at making the economy more self-sufficient.
• 😀 Under Spanish rule, the taxation system was regressive, burdening poor farmers while the wealthy paid less.
• 😀 During the American period, major reforms were introduced, such as taxes on alcohol, tobacco, insurance, and mining, as well as excise taxes on harmful goods.
• 😀 The 1904 Internal Revenue Law was passed to address issues in collecting land taxes and introduced 10 major sources of revenue.
• 😀 Tax evasion, a crime in the Philippines, was common during the American period, particularly in rural areas.
• 😀 The Americans suspended certain taxes, like those on opium, lottery, and coinage, which had been present during the Spanish era.
• 😀 The American taxation system aimed at generating sufficient revenue for the government, though the system was still imperfect and unfair in some areas.
• 😀 In 1907, the Philippine government doubled taxes on certain services and infrastructure, such as building roads and supporting maintenance.
• 😀 The Commonwealth period introduced significant tax reforms, including progressive income taxes, higher taxes on luxury goods, and the taxation of dividends and inheritances.
• 😀 Despite reforms, taxation during the American and Commonwealth periods remained unfair in certain sectors, and industrial investment incentives were minimal.

Q & A

What is taxation, and why is it important for governments?

Taxation is the compulsory collection of money by a government or levying authority. It is important because it finances governmental activities and public services like healthcare, education, and infrastructure.

How did taxation systems change under American rule in the Philippines?

Under American rule, the Philippines experienced some improvements in taxation. They introduced taxes on various goods and services like tobacco and alcohol, and made efforts to address tax evasion, which had been rampant during the Spanish period.

What was the major issue with the Spanish taxation system in the Philippines?

The Spanish taxation system was outdated and regressive. It disproportionately burdened poor farmers, while the wealthy were less affected, leading to widespread tax evasion.

What were the 10 major sources of revenue introduced by the Americans in 1904?

The 10 major sources of revenue included: taxes on alcoholic beverages, tobacco products, banks, documents, insurance companies, forest products, mining concessions, business and manufacturing, and occupational licenses.

What were excise taxes under the American taxation system, and how did they function?

Excise taxes were taxes imposed on specific goods and services, such as tobacco, alcohol, and fuel. These taxes were intended to generate revenue from products that could be harmful to health or had a specific societal impact.

How did the taxation system under the Commonwealth period change from the previous systems?

Under the Commonwealth period, the taxation system became more structured and just. Changes included the introduction of a progressive income tax rate, the replacement of cedula taxes, and the increase in taxes on luxury items and alcohol.

What is the significance of the Underwood-Simmons Tariff Act of 1913?

The Underwood-Simmons Tariff Act of 1913 marked an important change in the taxation system, paving the way for more formalized and organized tax collection under the Commonwealth government.

What role did the Japanese play in the taxation system during World War II in the Philippines?

During World War II, the Japanese administration continued the American taxation system with some exceptions, such as exempting the Japanese armed forces from certain taxes and controlling foreign trade.

What are some examples of the taxes introduced under the 1939 Commonwealth National Internal Revenue Code?

The taxes introduced included income tax, taxes on luxury items, excise taxes on goods like alcohol and tobacco, and taxes on dividends. This code replaced earlier taxation practices and structured the tax system more effectively.

What was the impact of the tax system on industrial development during the American and Commonwealth periods?

The tax system remained unfair for many sectors, especially for industrial investments. While some taxes were increased, there were few incentives for industrial development, leading to a less favorable environment for business growth.