Health Economy (Taxes)

Taxation

The process where the government collects money from people and businesses to fund public services.

Taxes

Mandatory fees paid to the government used to fund government activities.

What are the standards of taxation according to Adam Smith?

Fairness and Efficiency.

Fairness

principle: Rich people should pay more taxes because they can afford to.

Ability-to-Pay Principle

Rich people should pay more because they can afford to.

Horizontal Equity

Equal income = equal tax; people in equal positions should pay the same tax amount.

Vertical Equity

Higher income = higher tax; distributing the burden fairly across people with different abilities to pay

Proportional Tax

Same percentage tax for everyone.

Progressive Tax

Richer people pay a higher percentage of their income in taxes.

Regressive Tax

Same tax for all but impacts poorer individuals more.

Benefits Principle

Taxes based on the public services used by individuals.

Efficiency

Taxes should be easy, clear, and not wasteful. Wasting a little money and resources as possible.

Automatic Flexibility in taxation

Taxes adjust automatically based on economic changes.

Discretionary Flexibility in taxation

Government actively changes tax rates or rules in response to economic conditions.

Administration costs

It shouldn’t cost too much to collect taxes. costs in running tax collection authority

Compliance costs

Easy for people to follow/comply. costs of complying with the system

Excess burden

Taxes shouldn’t make people stop working or spending. a tax-induced behavior wherein consumer’s behavior is distorted by the tax levied by the government on a good

National Tax Law (Philippines)

A law ensuring taxation must be uniform and equitable.

National Internal Revenue Code (NIRC)

The codified law for national taxation.

Revenue Regulations (RRs)

Official rules for enforcing tax laws, issued by the Secretary of Finance.

Revenue Memorandum Orders (RMOs)

Internal guidelines used by BIR staff for tax management.

Help manage BIR's daily operations (except auditing), including how tax rules are applied across departments.

Revenue Memorandum Circulars (RMCs)

Documents published to announce clarifications and updates on tax laws.

Publish clarifications/amplifications of tax laws, rules, and precedents.

Revenue Memorandum Rulings (RMRs)

Rulings/opinions on the Tax Code by the Commissioner of Internal Revenue (CIR).

Capital Gains Tax

Tax on profit from selling property.

Documentary Stamp Tax (DST)

Tax on documents/transactions like loans, transfers, sales.

Donor’s Tax

Tax on gifts made while the donor is alive.

Income Tax

Tax on income or earnings from profession, trade, property, etc.

Percentage Tax

Business Tax on non-VAT registered businesses earning ≤ ₱550k/year.

Value Added Tax (VAT)

12% business tax on sale of goods/services. Indirect tax passed to buyers.

Withholding Tax on Compensation

Tax deducted by employer from employee salary and paid to BIR.

Expanded Withholding Tax (EWT)

Creditable tax withheld on specific payments (e.g., professional fees).

Final Withholding Tax (FWT)

Non-creditable tax — final payment of tax on income (e.g., interest, royalties).

Withholding Tax on Government Money Payments

Tax withheld by government agencies when paying private entities.This type of tax is deducted and remitted directly to the Bureau of Internal Revenue (BIR) to meet tax obligations of the payee.

Comprehensive Agrarian Reform Program (CARP)

A program aimed at improving land tenure and providing support services to farmers.

Land Tenure Improvement

Legal rights of farmers to own and control the land they farm.

KALAHI ARZone

A comprehensive development strategy aimed at rural improvement.

Agrarian Justice

Ensures protection under the law for both farmers and landowners.

DAR

 lead agency implementing CARP. The Department of Agrarian Reform, responsible for managing land reform and distributing land to farmers in the Philippines.

Land Distribution

This is the core of agrarian reform, where land is acquired and distributed to landless farmers.It aims to provide equitable access to land and improve the livelihoods of rural communities.

Operation Land Transfer (OLT)

This program involved the transfer of public agricultural lands to landless farmers, promoting direct access to land ownership as part of agrarian reform.

Voluntary Offer to Sell (VOS)

A mechanism where landowners voluntarily sell their land to the government for redistribution to landless farmers, aimed at improving agricultural productivity and equity.

Compulsory Acquisition (CA)

A process where the government forcibly acquires private land for redistribution to landless farmers, ensuring equitable access to land and promoting agrarian reform.

 Leasehold Operation

A system allowing farmers to pay rent to landowners for the use of land, providing tenants with greater security and promoting sustainable farming practices.

Applies to land within retention limits (the portion landowners are allowed to keep).This arrangement facilitates the cultivation of land by farmers who do not own it, often providing various rights and protections to the tenants.

Credit assistance

Financial support provided to farmers through loans or grants to enhance their agricultural production and sustainability.

Extension services

Programs that provide technical support, education, and resources to farmers, improving agricultural productivity and sustainability.

Irrigation

The artificial application of water to soil or land to assist in growing crops and maintaining landscapes. Irrigation helps manage water supply in agriculture to enhance yield and efficiency.

Farm-to-market roads and bridges

ease in transporting goods.

Land documentation

Establishing ownership and surveying the land.

Land valuation

Assessing the land’s fair market value.

Land distribution

Transferring land titles to qualified farmer-beneficiaries

Comprehensive Agrarian Reform Law

Provide free legal assistance to farmers and landowners.
RA No. 6657