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Look about you, to the schools, to the roads, to the constabulary, to all the many benefits of organized society. In return for the tax that you pay, you receive protection of life and property, municipal improvements which increase the value of your property, and many public conveniences.

People never like to pay taxes. But in the Philippines, the taxpayer has no just cause to complain, because of the value of the services rendered by the Government. Also, the amount of the taxes for each taxpayer is small. In the Philippines, if all the taxes were equally divided among the people, each person would only pay about seven pesos. But if one lived in other countries, he would pay much more in taxes. For instance, in Japan, the average tax for each person is about fifteen pesos, and in the United States, about thirty pesos.

Taxes, therefore, should be regarded, not as an evil, but as a small investment from which we receive large

returns.

93. Kinds of Taxes.-In the Philippines, as in other countries, there are various forms of taxation. The revenue of the Philippine Government comes from customs duties, internal revenue taxes, income and inheritance taxes, earnings from government enterprises, real property taxes, and various municipal and provincial taxes. We will next describe these kinds of taxes.

94. Customs Duties.-Customs duties are taxes which must be paid on certain articles entering the country. For example, a hat comes on a steamer from Great Britain to Manila. The hat is valued, let us say, at ten

pesos. When the hat reaches Manila, the Government says to the merchant who imports the hat, "You must pay as a tax fifty centavos." Then, when the merchant sells the hat, he will add this fifty centavos to his price. This kind of a tax is good, for it is easily collected by the

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Government and causes no inconvenience to the people. There is a long list of articles which are taxed in this way, collectively known as the tariff. The purpose of the tariff is to raise revenue for the Government and to protect new industries.

The tax in the tariff is called a duty. In the Philippines, duties are levied only upon imports coming from foreign countries. Imports from the United States are not taxed. Taxes on exports leaving the Philippines are prohibited by law.

Customs duties are collected by the Bureau of Customs at the different ports of entry in the Islands. The principal ports of entry are Manila, Cebú, Iloilo, Zamboanga, Jolo, Sual, Tabaco, Legaspi, Pulupandan, and Hondagua. Vessels engaged in foreign trade are prohibited by law to enter Philippine ports other than at these ports of entry. Customs receipts go wholly to the central Government.

95. Internal Revenue Taxes.-Internal revenue taxes receive this name because they are taxes levied within the Islands. There are many kinds of internal revenue taxes. The principal internal revenue taxes are the taxes on franchises, merchants, and banks; on cigars and liquors; on occupations, trades, and professions; on the output of mines; the charges for forest products; the stamp taxes on documents, such as checks; cedula taxes; and income and inheritance taxes.

Internal revenue agents and municipal treasurers collect internal revenue taxes. Internal revenue taxes are divided between the central Government and the provinces and municipalities.

96. Cedula Taxes.-Cedula taxes, usually two pesos a year, must be paid by male persons, with a few exceptions, between the ages of eighteen and sixty.

Cedulas have many uses. They are of special value to prove one's identity. Those who vote for public officers must have cedulas. Those who appear in court must present them. They must be shown whenever one transacts business with a public officer, pays taxes, receives money from public funds, assumes public office, or receives any license or permit from any public authority.

97. Income and Inheritance Taxes.-Income and inheritance taxes are two new and progressive taxes in the Philippines.

Income taxes are levied upon salaries or profits. This method is intended to place the burden of taxation upon those best able to pay-the rich-while exempting the poor from the tax. Single persons who have incomes over four thousand pesos a year, and married persons who have incomes over six thousand pesos a year, must pay a tax, the amount of which depends upon the amount of their incomes.

The inheritance tax is another excellent form of taxation. When a man dies, his relatives and friends do not receive his property as a matter of right, but with the permission of the Government. So, on his death a small portion of the estate is taken by the Government.

98. Municipal and Provincial Taxes.-Municipalities receive a portion of the internal revenue taxes. The principal source of municipal revenue is the real property tax. In addition, the council can levy other taxes, of which license taxes are the most important. Municipal money is kept in the municipal treasury, or is deposited with the provincial treasurer, and may be used only for local public purposes.

The principal sources of provincial revenue are the real property tax and a percentage of the internal revenue

taxes.

99. Real Property Taxes.-The real property tax, namely, the tax on lands and buildings, depends upon the value of the property. This is determined by the pro

vincial assessor in the provinces, and by the city assessor in Manila and Baguio. Certain property, as that valued at less than fifty pesos, lands and buildings owned by any branch of the Government, lands and buildings used for burying grounds, religious, charitable, or educational purposes, machinery, and, in some cases, fruit trees and bamboo plants, are exempt from taxation.

The provincial assessor attempts to determine fairly the market value of the property, increasing the valuation if the property has been improved during the year, and reducing the amount if it has been damaged. If the owner thinks the assessment is too high, he can appeal to the municipal council and then to the provincial board, and finally to the Chief of the Executive Bureau in Manila. In Manila and Baguio, the dissatisfied taxpayer can appeal to the Board of Tax Appeals.

Real property taxes must be paid to the municipal treasurer during the time announced each year. If the taxes are not paid during this time, a penalty, which increases the amount of the tax, is imposed, and the property is liable to be sold or taken by the Government.

The proceeds of the real property tax are divided between the province and the municipality.

100. Indebtedness. All countries have national debts. Some countries, like the United States, have debts of billions of dollars. National debts are justified because great improvements can be made immediately, while future generations, which also benefit by these improvements, can help bear the cost by continuing to pay a share of the debt.

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