Create custom vocabulary and terms in Drupal 7

my_module.install

<?php

/**
 * Implements hook_install().
 */
function my_module_install() {
  // Create a new vocabulary, if don't exists
  $vmn = 'my_vocabulary'; // Vocabulary Machine Name
  $voc = taxonomy_vocabulary_machine_name_load($vmn);
  if (!$voc) {
    $vid = _createNewVocabulary('My vocabulary', $vmn, 'Vocabulary description', 'my_module');
    // Create terms for the vocabulary
    _createNewTaxonomyTerm('My term 1', $vid, $vmn, 'Term 1 description');
    _createNewTaxonomyTerm('My term 2', $vid, $vmn, 'Term 2 description');
    _createNewTaxonomyTerm('My term 3', $vid, $vmn, 'Term 3 description');
  }
}

/**
 * Create a new taxonomy vocabulary.
 *
 * @param  string  $name        Vocabulary uman-readable name
 * @param  string  $vmn         Vocabulary machine name
 * @param  string  $description Description of vocabulary
 * @param  string  $module      Name of the calling module
 * @return integer              Vocabulary ID
 */
function _createNewVocabulary($name, $vmn, $description, $module) {
  $vocabulary = new stdClass();
  $vocabulary->name = $name;
  $vocabulary->machine_name = $vmn;
  $vocabulary->description = $description;
  $vocabulary->module = $module;
  taxonomy_vocabulary_save($vocabulary);
  return $vocabulary->vid;
}

/**
 * Create a new taxonomy term.
 *
 * @param  string  $name         Name of taxonomy term
 * @param  integer $vid          Vocabulary ID
 * @param  string  $vmn          Vocabulary machine name
 * @param  string  $description  Description of the term
 * @return integer               Term ID
 */
function _createNewTaxonomyTerm($name, $vid, $vmn, $description) {
  $term = new stdClass();
  $term->name = $name;
  $term->vid = $vid;
  $term->vocabulary_machine_name = $vmn;
  $term->description = $description;
  taxonomy_term_save($term);
  return $term->tid;
}