The internal Revenue Law of 1914, and similar provisions of other Acts which have succeeded it in effect, vested in the Collector of Internal Revenue the authority to determine whether or not stamps should be used for the collection of most of the internal taxes.   With certain important exceptions, the Collector of Internal Revenue has continued the use of Internal Revenue stamps as the means of verifying the collection of internal taxes.  Since September 1, 1914, special Tobacco Tax stamps, known as Internal Revenue Strip Stamps, have been prescribed for the collection of the excise tax on tobacco products manufactured for domestic consumption.  The stamps are affixed to the original package of  manufactured tobacco products.  The Collector of Customs collects the excise tax on imported tobacco products in cash.  Since November 1919, the excise tax on playing cards of both domestic and foreign manufacture has been collected by the affixture of a special Playing Cards stamp, called an Internal Revenue Strip Stamp, to each pack of  playing cards. 

Stamps are not used for the collection of the following internal taxes, which were imposed subsequent to the approval of the Internal Revenue Law of 1914:

1.  Income Tax (first imposed on incomes in 1914)
2.  Residence Tax (which replaced the Personal Cedula Tax in 1939)
3.  Estate, Inheritances, and Gift Taxes (imposed since July 1916)
4, Compensating Tax (imposed on imported merchandise since July 1939)

Stamps were also not used for the collection of the excise tax on the manufactured products of tobacco imported for domestic consumption.

The total internal revenues of the Central Government of the Philippines for the calendar year of 1938 were 66,301,810,61 pesos.  Of these, 33,022,562,83 pesos, or 49.8 percent of the total, were internal revenues collected by the use of revenue stamps.  The personal cedula tax was abolished, effective on January 1, 1938.  But collections of          diplomat cedula taxes during 1938 amounted to 40,146.69 pesos, or 6/100 of one percent of the total internal revenue collections.

 Thus In 1938, a total of 49,86 percent of the internal revenues were collected by the use of an accountable paper of the State.  It is to be noted, however, that although the percentage of the internal taxes collected by the use of revenue stamps has decreased since 1913, the total annual amount of the internal taxes collected by the use of revenue stamps has almost trebled.

The increase in the amount of internal taxes collected by the use of internal revenue stamps has resulted in the issue of internal revenue stamps of very high denominations.  The internal revenue stamps issued on January 1, 1905, consisted of  13 denominations, ranging from 1 centavo to 211 pesos. Denominations of 500 pesos, 1000 pesos and 5000 pesos were added prior to 1914. The 10,000 pesos and 20,000 pesos denominations were added in 1927 or 1928. Very few of the 5,000 pesos, 10,000 pesos and 20,000 pesos denominations were used, however.

The collection stamp taxes on certain Customs documents was begun in the Philippines in 1823, in accordance with a provision of the Royal Decree of July 13, 1822, which required that “permits of all kinds, including permits for unloading, which are issued by the Customs Houses, will be written upon Papel Sellado”.  Stamp taxes on Customs documents continued to be collected throughout the remainder of the Spanish regime.  Adhesive stamps were eventually substituted for stamped paper as the means of collecting these stamp taxes. But no special Customs stamps were provided during the Spanish regime. The Spanish-Philippine stamp-tax laws pertaining to the collection of stamp taxes on Customs documents remained in force until February 6, 1902.

Act No. 355 of the Philippine Commission, known as the Customs Administrative Act, was enacted on February 6, 1902, “to continue the Customs Service of the Philippine Islands and to provide for the administration thereof”. This Act repealed prior laws,  including those of the Spanish regime still in force, relating to the Customs Service.  Provisions were made for the collection of “fixed fees” for the issuance of certain customs documents and special customs stamps were created for the collection of some of these fees.  Amendments to the Customs Administrative Act that have been enacted since 1902 now require that the fees for the issuance of almost all Customs documents be paid by the affixture thereto of special CUSTOMS DOCUMENTARY stamps. The denominations of the CUSTOMS stamps now in use range from 1 centavo to 500 pesos.  The denominations from 50 pesos to 500 pesos, however, are used only on the licenses issued annually to vessels engaged in the coastwise trade.  Very few of these high denominations were used.

The idea of “splitting” revenue stamps, so that one half of each stamp would be attached to the document subject to the stamp tax and the other half would be attached to the stub of the document, seems to have originated in Spain. In the Philippines, this method of using revenue stamps was first applied to the Recargo de Cedulas Personales (Surtax on
Personal Cedula) stamps created by the Royal Order of April 15, 1886 (1836?).  The split method of using revenue stamps was subsequently applied during the Spanish Regime to the Recibos y Cuentas stamps affixed to the cedulas of Chinese minors and to the receipts or the payment of dues issued by “eirelsa, casinos, and societies”.

The split method of affixing revenue stamps was abandoned from the date that the U.S. Military authorities took control of the Customs and Internal Revenue collections in August 1898, until January 1, 1905.  During this period, however, a lack of revenue stamps of the required denomination resulted in the frequent use on Customs documents of one half of a revenue stamp at one-half of the value of an entire stamp and one fourth of a revenue stamp at one-fourth of the value of an entire stamp.  Specimens of the original documents bearing these “fractional” revenue stamps are now very rare.