This provision of Act No. 2339, and similar provisions of other Acts which have succeeded it in effect, have vested in the Collector of Internal Revenue the authority to determine whether or not stamps shall be used as the means of collecting most of the internal taxes. Documentary stamps taxes are the only internal taxes for the collection of which stamps havbe been prescribed by the Internal Revenue Law since July 1, 1914. With certain important exceptions, the Collector of Internal Revenue has, however, continued the use of INTERNAL REVENUE stamps as a means of verifying the collection of internal taxes.

Since September 1, 1914, the excise tax on tobacco products manufactured in the Philippines for domestic consumption has been collected by affixing special tobacco Tax stamps for the original packages of such products prior to their removal from the place of manufacture. Since November 1919, the excise tax on playing cards both of domestic and foreign manufacture has been collected by affixing special Playing Card stamps to the original packages prior to their removal from the place of manufacture or from the Customs House for sale in the Philippines.

Stamps are not used for the collection of the following internal taxes which have been imposed subsequent to the passage of the Internal Revenue Law of 1914:

1. Income Tax (first imposed in 1914)
2. Residence Tax (which replaced the Cedula Tax in 1939)
3. Estate, inheritance and gift taxes (imposed since July 1, 1916)
4. Compensating Tax (imposed on imported merchandise since 1939)

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

Internal Revenue taxes are classified in several different “schedules,” according to the nature of the tax and the persons or kinds of business subject to tax. Different forms of tax receipts are provided for the various schedules. Merchants, manufacturers, common carriers, contractors and others subject to a “percentage tax” are grouped in Schedule C.

The annual “privilege tax” for the issuance of the Privilege Tax Receipt was two pesos. This tax was paid at the time the Privilege Tax Receipt was issued and INTRERNAL REVENUE  stamps to the amount of two pesos were affixed at that time in the space provided therefore at the top of the receipt. The missing halves of those stamps remained attached to the stub which was retained by the issuing officer. In addition to the privilege tax, the common carried which was licensed by this Privilege Tax Receipt was subject to a percentage tax of 1 percent of its gross receipts. This percentage tax was paid at the end of each quarter. Four “coupons” with two attached to the left and two on the right side of the Privilege Tax Receipt, were provided for entry at the end of each quarter of the gross receipts and the amount of the tax thereon. The proper entries were made upon one of those coupons at the end of each quarter by the taxpayer.

The Privilege Tax Receipt was then presented to the municipal treasurer, or his agent, who, having verified and collected the amount of the tax, affixed INTERNAL REVENUE stamps to the receipt, in such manner that, when the coupon was separated from the Privilege Tax Receipt, one half of each stamps was attached to the coupon and receipt. Entry was also made on the back of the receipt of the amount of the tax paid each quarter. Most of the stamps are affixed to  the back of the receipt. Removed coupons are retained in the files of the municipal treasurer. The Privilege Tax Receipt is retained permanently by the taxpayer.

[128] Quoted from page 247 of the American Journal of Philately for August 1903.

[129] See page 252, American Journal of Philately, August 1903.