APPENDIX FF. UNITED STATES MILITARY GOVERNMENT IN THE PHILIPPINE ISLANDS, OFFICE OF COLLECTOR OF INTERNAL REVENUE, The SECRETARY OF THE MILITARY GOVERNOR, Manila, P. I. SIR: I have the honor to submit the following report of the administration and business of this office for the fiscal year ending June 30, 1900: At the close of the fiscal year 1898-99 the collection of internal revenue in the Philippine Islands had been confined to the city of Manila and suburbs, and the city of Iloilo and its suburbs. During the latter part of the year 1899 collectors were appointed by the military governor in many towns which were then being occupied by American troops, and this office was called upon to furnish these offices supplies, blanks, internal-revenue stamps, and instructions, until about 70 offices are now being maintained. Until April, 1900, this office had no administrative authority over these new offices, nor were reports rendered except to the auditor by the individual officers. In April an application was made to the military governor, and General Orders, No. 54, M. G. O., April 18, 1900, was issued, outlining an organization for this department with the Manila office as the head office, each military department to have a supervisor, each military district a collector, and where necessary assistant collectors for suboffices in the larger and more populous districts. This organization has been in operation since April, 1900, and while not yet completed, has been extended until, on June 30, 1900, the following offices had been opened and the following officers detailed for this duty: Lieut. C.G. Lawrence, Forty-fifth Infantry, collector. Nueva Caceres Lieut. C. H. Morrow, Forty-seventh Infantry. Suboffices: Fourth district. Lieut. W. S. Conrow, Forty-third Infantry Camarines Sur. Albay. Do. Camarines Norte. Albay. Bulan Donsol. Daet.. Pasacao Camarines Sur. Sorsogon Albay. Virac Catanduanes I. Albay. Do. Lieut. James M. Little, Nineteenth Infantry Third district. Capt. W. K. Jones, Sixth Infantry, collector Baybay. Leyte. Laguan.. Do. Malitboc Do. Do. Do. Ormac. Cebu.. Cebu. Fourth district. Lieut. H. I. Hirsch, Eighteenth Infantry, collector... Iloilo.. Panay. Do. Lieut. S. E. Worthington, Twenty-sixth Infantry. The organization of this department necessitated a great many books, blank forms, and much office furniture, which have been supplied as fast as obtained with the limited facilities at hand. New methods of bookkeeping have been devised and a complete system is now in operation, and printed instructions have been furnished to all collectors. During the fiscal year just ended the internal-revenue receipts in Manila have been $805,213.07, an increase of 75 per cent above the collections for the previous year, as shown by reference to Exhibit A, "Collections of internal revenue for the fiscal year ending June 30, 1900." This increase has been caused by increased industrial activity and an increase in the rents of nearly all properties. The revenues collected this year from industrial and urbana taxes in the city of Manila and its suburbs have exceeded the collections made in any previous year under Spanish administration for the same territory. Upon representation of this fact to the military governor it was decided to reduce the taxes, and General Orders, No. 53, M. G. O., April 18, 1900, was therefore issued, which reduced the industrial taxes 27.05 per cent, and the urbana or direct house property tax 13.3 per cent, by the elimination of all surtaxes heretofore assessed, which have proven vexatious in their assessment and odious to the taxpayer, who was unable as a rule to understand Spanish surtaxes. The taxes as now levied are neither considered burdensome nor unjust to the native or foreign taxpayer, except to a few Americans who have arrived within the past two years. After a careful revision of the regulations governing the industrial, urbana, and stamp taxes it is believed that they may be continued indefinitely until a land tax can be assessed, which will obviate the necessity of maintaining this system to any extent. Some opposition to these taxes, evidenced by petitions from the presidentes of various towns in the provinces, has been shown, but it is believed that these petitions were instigated by town officials, who have during the past year or more been collecting these taxes, the revenues of which went almost entirely for salaries for the employment of said officials, or were turned over to the so-called insurgent tax collectors. It appears that the taxpayers in all towns which have been occupied for any length of time by American troops have more money, received from the sale of goods or for services performed, than ever before. Lieut. Ellis Cromwell, Thirty-ninth Infantry, United States Volunteers, was detailed as assistant in this office by Special Orders, No. 12, May 7, 1900, and has been of much assistance in the local work. A shipping department has been added to the office for the dispatch of supplies to the internal-revenue offices, and registration offices and stamped official paper to the courts wherever established. The clerical force has been greatly improved by the discharge of 5 incompetent native clerks and the employment of 9 American clerks, the 5 enlisted men formerly on duty having been relieved. The total force consists of 2 officers, 11 American, and 32 native clerks in the Manila office. The expenses for salaries and supplies have been greatly increased over last year, but it is presumed that the collection of revenue in the provincial offices will more than offset this increase, as a large portion of supplies purchased have been shipped to establish provincial offices. Exhibit A shows the collections and disbursements during the fiscal year, by months and quarters, but a detailed statement of the collections of offices outside of Manila can not be submitted, as prior to June no reports were received from such offices by this office. The following shows the work of this office in brief under the various headings: INDUSTRIAL TAXES. By reference to Exhibit A the industrial taxes for the fiscal year show an increase of $185,781.95, or more than 62 per cent above the collections for the previous year, due to new business and a large increase in collections of the income tax on dividends and salaries. To collect the industrial tax there were issued 10,054 patentes, 30,959 quarterly receipts, and 4,163 bajas, leaving 9,071 industrial taxpayers on the registers June 30, 1900, in Manila. During the month of January, 1900, all old Spanish patentes were discontinued and new ones issued. The total delinquent industrial tax June 30, 1900, amounted to $1,246.85, of which $700 is considered uncollectable on account of the disappearance of the debtors. No extreme measures have been applied during the year against delinquent taxpayers, and only one fine of $200 has been assessed for defraudation, yet the delinquent tax list is considered small. All delinquents are compelled to pay the 25 per cent delinquent penalty, assessed at the end of the first month of each quarter. Business men in general welcome the abolition of the surtax of 10 per cent plus 10 per cent plus 5 per cent, which had been added at various times by the Spanish Government, and taxpayers now pay according to the industrial tariff. Increased revenues in this department are anticipated for the next fiscal year notwithstanding the decrease in the taxes. URBANA TAXES. The increase in rents throughout the city of Manila has also increased the urbana taxes by $41,080.96, or 32 per cent above the collections for the last fiscal year. There are 4,008 properties on which urbana taxes have been collected in the city of Manila and suburbs, an increase of 531 properties during the year. These taxes were paid by 2,169 owners or administrators, which required the issuance of 16,367 receipts. Many properties burned in 1898-99 having now been rebuilt will soon begin to pay taxes, and many new buildings are in course of construction, which will also increase this revenue for the next year, even with the reduction of 13.3 per cent caused by the abolition of the surtaxes. The tax as now assessed practically amounts to 3 mills per annum on the value of a building. The delinquent urbana taxes June 30, 1900, since the American occupation of Manila are as follows: |