Note 19 — Chapter II · THE ESTABLISHMENT OF THE AUDIENCIA OF MANILA (1583–1598).

The alcabala (al que vale, “according to value”) was a percentage tax levied on goods (movable and immovable) sold or exchanged. Merchants were held accountable for the payment of this tax, and for this purpose their accounts were examined by royal officials at regular intervals (Escriche, Diccionario, I, 143). It was first introduced into the Indies by Philip II in 1574, having been levied in Spain as early as 1079, though not in its perfected form. In accordance with the tariff of November 1, 1591, it was exacted from merchants, apothecaries, encomenderos (having farms and cattle-ranches), ragpickers, cloth-makers, silversmiths, goldsmiths, blacksmiths, and shoemakers. An alcabala was paid on wine. By the cédula of June 7, 1576, the rate of alcabala was fixed at two per cent. In Perú it was raised to four per cent during the administration of the Conde de Chinchón as viceroy and was collected at that rate there until the cédula of July 26, 1776, raised it to six per cent. This rate was paid thereafter in the Spanish colonies (Recopilación, 8–13–1 to 14, notes, 2 and 4), except for an increase in the rate to 8 per cent in 1782, to meet the added expenses of war. The old rate of 6 per cent was restored in 1791 (transcripts of these cédulas exist in A. I., 87–1–20).

Exemptions from this tax were made in favor of churches, monasteries, and prelates when they bought or sold goods not for profit. When they engaged in commerce for its own sake they were obliged to pay the alcabala in the same way as laymen (Recopilación, 8–13–17). Goods belonging to the Santa Cruzada, provisions bought, sold or stored which were destined for the poor, and munitions of war paid no alcabala (ibid., 18–23). Indians were also exempted under certain circumstances (ibid., 24; see entire Title 13 of Book 8, Recopilación, for further specifications regarding the payment of this tax). In 1568 Philip II exempted the Philippines for thirty years. As noted above, the alcabala was not introduced regularly into the Indies until 1574, though it was levied in individual cases as early as 1558. Even earlier than this Pizarro had obtained the right to levy it in Perú for a period of a hundred years (ibid., 8–13–1; note 1), but Philip II ordered it paid in the Philippines on August 9, 1589 (ibid., 9–45–66).

The almojarifazgo, like the alcabala, had been utilized early in the history of the Peninsula and because a productive source of revenue, it was introduced into the Indies. The earliest law dealing with this tax in New Spain was promulgated by Charles V on October 18, 1553, exempting cargoes which had already paid the tax in Spain. On June 24, 1566, and on December 28, 1568, Philip II ordered a five per cent export tax on all goods leaving Seville for the Indies (the ordinance of December 28, 1562, having fixed it at two and a half per cent) and an import tax in the Indies on these same goods of ten per cent, making in all a tax of fifteen per cent. Wine was to pay a ten per cent import and export tax respectively, making a total of twenty per cent paid on that commodity (ibid., 8–15–1, 2, 8). The law of April 21, 1574, ordered a two and a half export and a five per cent import tax on goods shipped between colonies (ibid., 10). On August 9, 1589, a three per cent almojarifazgo was authorized in the Philippines, with exemptions on provisions, munitions, and other specified articles brought to the Islands by the Chinese, Japanese, Siamese, and Borneans (ibid., 22, 24). The tax on Chinese merchandise was raised from three to six per cent on November 20, 1606 (ibid., 23). Chinese goods from the Philippines paid a ten per cent almojarifazgo at Acapulco. This tax was also paid on leaving the Philippines or other New Spain ports and on entrance at Acapulco (ibid., 21). For exemptions see Recopilación, 8–15–26 to 30.