Chapter 11 Percentage Taxes 135

Chapter 11 REVIEW
QUESTIONS

1. What is the general percentage tax rate applied to taxable sale

or receipts of a non-VAT business?

2. Are all gross receipts of domestic common carriers subject to

VAT? Explain.

3. Identify some of the domestic common carriers that are not

subject to business tax?

4. Is the gross receipt of a VAT-registered common carrier, lesser

than P1,500,000 per year subject to VAT.

5. Are gross receipts of International Carrier for transport of

passenger from and to the Philippines subject to 3% business
tax?

6. What is a government franchise?

7. Are all gross receipts from franchise subject to 2% tax on

gross receipts?

8. Can radio and TV broadcasting franchise holder be allowed to

register as VAT?

9. What are the amusement places that are subject to specifice

percentage tax?

10. When will a World or Oriental boxing exhibition be exempted

from business tax?

11. What is an IPO?

12. When is the required due date for filing Form 2551M for
percentage tax?
136 TRANSFER AND BUSINESS TAXATION

Chap ter 1 1 PROBLEM S

Name: Score:

Problem 111 True or False

Write True if the statement is correct, or False if the statement is

incorrect.

1. A non-VAT business paying Output VAT is allowed to

claim Input VAT.

2. Owners of animal-drawn, two-wheeled vehicles are subject

to a percentage tax of 3%.

3. The gross receipts of common carrier from transport of

passengers by land are taxed at 3%.

4. The tax base of gross receipts of common carriers subject

to 3% tax has minimum amount for the quarter.

5. International carrier is subject to 3% tax on its gross

receipts within and outside the Philippines.

6. The gross receipts of water utilities franchise holder is

subject to 3% business tax.

7. There are franchise holders whose gross receipts are

subject to 10% even if not registered as VAT.

8. The 10% tax on overseas dispatch is tax expense of the

telecommunication company providing the service.

9. All insurance premium collected by life insurance

company is subject to 5% gross receipt tax.

10. Gross receipts from cabaret and nightclubs are subject to

18% gross receipts tax.

11. Boxing exhibition for world championship held outside is

subject to Philippines business tax of 15%.

12. The payment of % of 1% tax on sale of securities will

exempt the gain from such transaction from capital gain
tax.
 Chapter 11 Percentage Taxes 137

Name: Score:

Problem 112 True or False

1. The most applicable method of determining the percentage

tax of taxis and jeepneys would be the actual gross
receipts.

2. International carriers doing business in the Philippines

are required to pay 3% business tax of their quarterly
gross receipts.

3. A franchise is a privilege to serve the public acquired by

special grants from private corporations.
Cut here and submit this page to your professor.

4. A VAT-registered radio/television broadcasting company is

required to pay percentage tax if its annual total gross
receipts do not exceed P10,000,000.

5. CNN is required to pay 10% percentage tax from messages

originating from the Philippines by telephone or telegraph.

6. A life insurance premium refunded within 6 months is not

subject to a 5% percentage tax.

7. Gross receipts by all amusement places are subject to

10% percentage tax.

8. A professional basketball game is subject to a percentage

tax of 15%.

9. Cost of winning tickets is not deductible from horse race

winnings.

10. If the 50% of the voting shares is owned by fewer than 20

stockholders, this corporation is regard as closely held
corporation.
138 TRANSFER AND BUSINESS TAXATION

Name: Score:

Problem 11 3 True or False

Write True if the statement is correct, or False if it is incorrect.

1. Percentage tax is a transfer tax.

2. Percentage tax is an advalorem tax.

3. Generally, percentage tax is 10% of sales.

4. A business has the option to be registered as percentage

tax if its sale is P1,500,000 and below per year.

5. Buyers from non-VAT business are required to withhold

the percentage tax on their purchases from such
business.

6. Generally, the withholding tax on the payments by the

government to persons who are exempt from payment of
VAT and who are not a VAT-registered person is 3%.

7. The percentage tax on sale of shares of stocks outside

stock exchange is of 1%.

8. The tax on winning is required to be remitted to BIR

within 20 days from the date withhold.

9. Boxing exhibitions for World and Oriental Championships

are exempted from amusement tax if one of the
contenders is a Filipino and a Filipino Citizen promotes
such exhibitions.

10. Net trading gains obtained by banks and non-bank

financial intermediaries are subject to 5% percentage tax.

11. The gross receipt tax of financial institutions is to be paid

to the BIR within 10 days following the end of the taxable
month.
Chapter 11 Percentage Taxes 139

Problem 11 4 Multiple Choice

Encircle the letter that corresponds to the best answer.

1. Which of the following statement is not true about other

percentage tax?
a. It is a business tax.
b. It is a transfer tax.
c. It is an advalorem tax.
d. It is not a progressive tax.

2. Which of the following business is not subject to other

percentage tax?
a. Carriers of passengers
b. Life insurance
c. Carriers of cargoes
d. Sale of shares of stock in the local stock exchange

3. Which of the following overseas call is subject to percentage

tax?
a. Transmitted by the A City Government of Baguio
b. Transmitted by Health Center Massage Clinic of Baguio
c. Transmitted by US embassy in the Philippines
d. Transmitted for dissemination of news item through
public press

4. Which of the following is subject to 10% percentage tax?

a. Life insurance policy premiums collected by a resident
foreign insurance company
b. Life insurance policy premiums collected by agent of
resident foreign insurance company
c. Insurance policy premium collected by agent of
nonresident foreign insurance company
d. Premium on insurance policy taken directly by the owner
of the property insured

5. Admission fees to cockpits and race tracks are subject to

a. tax on paid admission.
b. tax on gross receipts.
c. tax on winnings.
d. None of the above.
140 TRANSFER AND BUSINESS TAXATION

6. Which of the following items is exempt from percentage tax?

a. Businesses with annual gross sales of P100,000 and
below
b. Overseas call made by the Philippine government
c. Overseas messages transmitted by any embassy and
consular offices of a foreign government.
d. All of the above.

7. Statement 1: An IPO sale of 33% of outstanding shares is

subject to a two percentage tax.
Statement 2: In case of financial leasing, the taxable gross
receipts exclude recovery of principal.
a. Only statement 1 is true.
b. Only statement 2 is true.
c. Both statements are true.
d. Both statements are false.

8. The percentage tax rate on shares of stock traded in the stock

exchange is
a. 1/2 of 1% of sales.
b. 1 1/2 % of capital gain from the transaction.
c. 1% of sales which is more than 25% of the outstanding
stocks issued.
d. 2% of sales which is more than 25% but not more than 33
1/3% of the outstanding stocks issued.

9. Which of the following gross receipts is not subject to

business tax?
a. Transport of passengers by land using animal-drawn, two-
wheeled vehicles
b. Transport of passengers by water using bancas
c. Compensation income of an individual taxpayer
d. All of the above.

10. Which of the following statements is correct?

a. The Gross Philippine Billing includes total amount of
gross revenue including noncontinuous and interrupted
flight.
b. A VAT-registered radio and TV broadcasting company is
subject to a percentage tax of 3% if its total gross receipts
during the year is P1,500,000 and below.
Chapter 11 Percentage Taxes 141

c. The gross receipts of the gas and water franchise are

subject to a 3% percentage tax.
d. Overseas dispatch, message or conversation is subject to a
percentage tax of 10%.

11. Which of the following is not correct?

a. The percentage tax on stock transaction inside stock
exchange is to be remitted within 5 banking days from the
date withheld by the broker.
b. The percentage tax on winnings is to be remitted within 20
days from the date withheld.
c. The percentage tax on IPO is to be remitted within 30 days
from the date of listing in the local stock exchange.
d. The percentage tax on overseas dispatch is to be remitted
within 20 days from the date withheld.

12. The percentage tax return is to be filed and paid within

a. 25 days from date of the transactions.
b. 30 days from date of the transactions.
c. 20 days after the end of each taxable month.
d. 30 days after the close of each taxable quarter.

13. Manglapus invested P500,000 in the shares of stock of Cayoto

Company. Cayotos shares of stocks are listed and traded in
the local stock exchange. Manglapus sold the share for
P600,000 through the local stock exchange. How much is the
amount of percentage tax?
a. None, because the sale was traded in the local stock
exchange.
b. of 1% multiplied by the selling price of P600,000.
c. of 1% multiplied by the gain of P100,000.
d. 5% multiplied by the gain of P100,000.

14. What is the tax rate on gross receipts of a small business with
P500,000 gross receipts for the year, but opted to be
registered as a VAT business?
a. 2%
b. 3%
c. 12%
d. None
142 TRANSFER AND BUSINESS TAXATION

Problem 11 5 Percentage Tax

Dok Ling sells pasalubong products along Magsaysay. His

average monthly sales is P40,000 with a gross profit rate of 25%.

How much is his total percentage tax in the year?

Total Business Tax
a. P 3,600
b. P12,000
c. P14,400
d. P48,000

Problem 11 6 Percentage Tax

Lulu Guina has an annual average gross sales of P60,000 in her

small sari-sari store. Her percentage tax would be
a. Exempt.
b. P 180.
c. P1,800.
d. P6,000.

Problem 11 7 Business Tax

A non-VAT sole proprietorship variety store experienced an

average annual gross receipts of less than P550,000. For the 1st
quarter of 2009, the following information were gathered:

Beginning inventory of merchandise P 120,000

Purchases from VAT-registered suppliers 450,000
Gross sales 540,000

How much is the business tax?

a. P 9,900
b. P13,500
c. P16,200
d. P54,000

Problem 11 8 Business Tax

Chapter 11 Percentage Taxes 143

A percentage tax-registered business issued a sales invoice

amounting to P28,000 inclusive of 12% VAT. How much should
be the business tax payable pertaining to this transaction?
a. P5,250
b. P3,250
c. P2,750
d. P2,500

Problem 11 9 Mini-Mart Business

Mrs. Fiona De Guzman, a mini-mart owner and a non-VAT-

registered person provides the following data for the year 2005:

Gross sales P500,000

Cost of sales 200,000
Merchandise inventory, end 100,000
Operating expenses 100,000

The amount of percentage tax payable is

a. P50,000.
b. P30,000.
c. P15,000.
d. P 5,000.

Problem 11 10 Hotel and Restaurant Business

Mrs. Maribelle Racal is the operator of Prince Hotel and

Restaurant. The restaurant is open to the public. The food and
soft drinks served to the hotel guest come also from the
restaurant. The following data are for the first quarter of 2005:

Gross receipts- room rentals P54,000

Gross receipts- foods/softdrinks served to hotel guests 18,000
Gross receipts- foods/softdrinks from other customer 36,000

The percentage taxes due and payable on the gross receipts of the
first quarter of 2005 is
a. P10,800.
b. P 5,400.
c. P 3,240.
d. P 1,620.
144 TRANSFER AND BUSINESS TAXATION

Problem 11 11 Domestic Carriers Tax

Agca Wili, a jeepney operator with 5 units operating in Baguio

City reported P100,000 as gross receipts for the quarter . His
percentage tax for the quarter is
a. P 600.
b. P1,971.
c. P3,000.
d. P9,859.

Problem 11 12 Domestic Carriers Tax

X operates a domestic carrier in Baguio City. His gross receipts

from transport of passengers for the 1st quarter of 2009 are:

Ten (10) taxi units P 900,000

Five (5) bus units with 60-seater capacity 1,000,000
Fifteen (15) two wheeled calezas carried by horses 150,000

The common carrier tax due is

a. P56,580.00.
b. P57,000.00.
c. P59,146.50.
d. P59,580.00.

Problem 11 13 Common Carriers Tax

Lulubog-Lilitaw is a common carrier by sea. During the 1 st

quarter its gross receipts consist of the following:

Transport of passenger P1,000,000

Transport of goods and cargo 6,000,000

How much is the total business tax?

a. P210,000
b. P300,000
c. P750,000
d. P840,000

Problem 11 14 Common Carriers Tax

Lerap Carrier, a common carrier by land, provides the following

average gross annual receipts:
Chapter 11 Percentage Taxes 145

Transport of passengers P10,000,000

Transport of cargoes 6,000,000
Sale of goods during travels 1,000,000

How much is the estimated average business tax per quarter?

a. P285,000
b. P250,000
c. P200,000
d. P150,000

Problem 11 15 International Carrier

British Airways reported a monthly gross receipts of P10,000,000

from Philippine operation. Its average monthly operating expenses
amounts to P6,000,000. How much is the monthly percentage tax
payable of British Airways?
a. P1,000,000
b. P 400,000
c. P 300,000
d. P 12,000

Problem 11 16 International Carrier

Asian International Carrier reported the following gross receipts

from tickets sold:

Outside for trip - Manila to USA P1,000,000

Outside for trip - USA to Manila 1,200,000
In the Philippines for trip - USA to Manila 1,500,000
In the Philippines for trip Manila to USA 1,100,000

The Philippine business tax to be paid is

a. P 63,000.
b. P 78,000.
c. P144,000.
d. P490,000.

Problem 11 17 Franchise Tax

DNum is delivering water to its customers as franchise holder for

such business. During the period, its gross receipts amounted to
P1,000,000.
146 TRANSFER AND BUSINESS TAXATION

The percentage of DNum would be

a. P50,000.
b. P30,000.
c. P20,000.
d. P10,000.
Problem 11 18 Franchise Tax
ABN Company operates a water and radio broadcasting franchise
provides the following in 2005:

Gross receipts:
Water franchise P 2,000,000
Radio franchise 10,000,000
Operating expenses 5,000,000
Net income P 7,000,000

The total percentage tax on franchise is

a. P360,000.
b. P340,000.
c. P210,000.
d. P240,000.

Problem 11 19 Overseas and Local Calls

Libag uses telephone only for nonbusiness communications. His

statement of account provided by Digitel during the month shows
the following total calls:

From Philippines to Canada P5,000

From US collect in the Philippines 3,000
Local calls 2,000

How much is Libags total percentage tax from overseas and local
calls?
a. P1,000
b. P 700
c. P 590
d. P 0 -

Problem 11 20 Overseas and Local Calls

Chapter 11 Percentage Taxes 147

The City of Baguio called US President Bush and President Arroyo

to attend the Panagbenga 2005 incurring telephone call costs of
P10,000 and P2,000, respectively.

How much is the percentage tax to be paid the City of Baguio?

a. Exempt
b. P 60
c. P300
d. P360

Problem 11 21 Overseas Calls

TalkTell remitted P75,000 as percentage tax from overseas calls

serviced to customers. How much was the total collection from
customers?
a. P700,000
b. P750,000
c. P800,000
d. P825,000

Problem 11 22 Tax on Insurance Premium

PhilAm Life Insurance collected P100,000 from Ramanac Amin, a
Muslim national residing in Saudi Arabia. How much is the
percentage tax to be remitted by PhilAm to the BIR?
a. P10,000
b. P 5,000
c. P 3,000
d. P - 0 -

Problem 11 23 Tax on Insurance Premium

Dico Alam insured his airplane to a foreign insurance company
for a total premium of P200,000. The insurance covers a policy of
P2,000,000. If Alam got the assistance of an authorized agent,
how much is his percentage tax obligation?
a. P - 0 -
b. P 6,000
c. P10,000
d. P20,000

Problem 11 24 Amusement Tax (Cockpit)

148 TRANSFER AND BUSINESS TAXATION

A cockpit owned by Pal Lot reported the following receipts and

expenses for the period:
Gross receipts from cockpit entrance fee P 500,000
Gross receipts from restaurant inside cockpit
compound:
- Food sales 200,000
- Beverage sales 100,000
Business expenses 50,000

The total amusement tax is

a. P 24,000.
b. P 80,000.
c. P 99,000.
d. P144,000.

Problem 11 25 Amusement Tax (Boxing)

Tic Kim, a Filipino, promoted a boxing match featuring Manny

Pinakyao (Filipino). Gross receipts related to the boxing match are
as follows:

Admission fee P2,000,000

Radio and TV coverage 1,000,000

1. The amusement tax if the boxing match is a National Boxing

Championship would be
a. P300,000.
b. P220,000.
c. P 90,000.
d. Exempt.

2. The amusement tax if the boxing match is a World Boxing

Championship would be
a. P300,000.
b. P220,000.
c. P 90,000.
d. Exempt.

Problem 11 26 Tax on Winnings

After spending buying 100 tickets for a total amount of P200,000,

Uho Geen won P1,000,000 in horseracing winnings. How much if
the percentage tax on his winnings?
Chapter 11 Percentage Taxes 149

a. P100,000
b. P 99,800
c. P 80,000
d. P 29,940

Problem 11 27 Tax on Winnings

Florence Dog-gong has the following winnings (losses) during the

year:
Cockfighting P 90,000
Philippine Charity Sweepstakes 2,000,000
Lotto (PAGCOR) 1,000,000
Horseracing winnings 100,000
Cost of tickets, P1,000 belongs to winning tickets ( 30,000)
Billiard losses (400,000)
Casino losses (300,000)

The business tax on winnings is

a. P 9,900.
b. P 18,900.
c. P249,000.
d. P319,000.

Problem 11 28 Shares of Stock

Caba Doy sold 2,000 shares through the Philippine Stock

Exchange for P1,000,000. How much is the percentage tax if Doy
acquired the shares of stock for P800,000?
a. P25,000
b. P 5,000
c. P 1,000
d. P - 0 -

Problem 11 29 Shares of Stock

Tic Ling sold 1,000 shares directly to the buyer for P1,000,000.
How much is the percentage tax if Tic acquired the shares of
stock for P600,000?
a. P25,000
b. P 5,000
c. P 2,000
d. P - 0 -
150 TRANSFER AND BUSINESS TAXATION

Problem 11 30 Initial Public Offering

A Family corporation has 750,000 of its P10 par common stocks

outstanding. Its Board of Directors decided to issue for the first
time for public ownership 400,000 of its unissued common
stocks. The 400,000 shares were sold for P12 per share.

The percentage tax is

a. P48,000.
b. P 8,000.
c. P 9,500.
d. P16,000.

Problem 11 31 Initial Public Offering

Segurista Corporation, a closely held corporation, offered for the

first time its own shares of stock at par of P20 per share. The
corporations authorized capital stock is P5,000,000, with a
P2,000,000 outstanding capital stock. The gross receipts at its
initial public offering was P600,000.

The percentage tax for the initial public offering was

a. P 3,000.
b. P12,000.
c. P18,000.
d. P24,000.

Problem 11 32 Gross Receipts Tax

In January 2005, Ungak Bank reported a net income of

P500,000, net of debts securities trading loss of P100,000. In
February 2005, Ungak reported the following gross receipts:

Interest income with maturity more than 5 years P 400,000

Leasehold income 300,000

How much is the gross receipts tax on the collections of Ungak for
February 2005?
a. P30,000
b. P25,000
c. P19,000
d. P14,000
Chapter 11 Percentage Taxes 151

Problem 11 33 Gross Receipts Tax

In December 2005, Piggy Bank reported a net income of

P900,000, net of trading loss of P50,000. In January 2006, Piggy
reported the following gross receipts:

Interest income with maturity less than 5 years P 600,000

Royalty income 300,000
Gain from sale of derivatives 200,000

How much is the gross receipts tax on the collections of Piggy for
January 2006?
a. P45,000
b. P52,500
c. P55,000
d. P65,000

Problem 11 34 Tax Withheld by Government

Marites Gentil is a non-VAT-registered person. She supplied the

City of Tacurong with the office equipment on a cash basis. She
was issued a P62,400-check as net proceeds of her delivery.

How much is the percentage tax withheld by the City Government

of Tacurong?
a. P1,950
b. P1,891
c. P 650
d. P - 0 -

Problem 11 35 Net Payment by the Government

Dadiangas City was supplied with P200,000 water from a

franchise holder. How much would be the check issued by the
City Government of Dadiangas as net payment for the account?
a. P198,000
b. P196,000
c. P194,000
d. P192,000

Problem 11 36 Percentage Tax on Hotel Operations

152 TRANSFER AND BUSINESS TAXATION

Mrs. Home is a non-VAT hotel operator. Purchases of goods and

services from VAT-registered taxpayers amounted to total invoice
costs of P880,000. The following data shows the transaction for a
period:
Revenues Collections
Rental from rooms P 500,000 P 480,000
Rental from hotel gym 200,000 190,000
Rent of swimming pools 100,000 100,000
Receipts from halls:
Foods 2,000,000 1,950,000
Beverages 2,500,000 2,400,000

Required: Compute for the total percentage taxes.

Problem 11 37 Common Carriers Tax

Mr. Dido Can is a taxi operator with 2 units of taxi operating in

Baguio City. Its reported gross receipts for 2008 are as follows:

April P60,000
May 65,000
June 70,000
July 50,000

Required: Compute for the percentage tax payable for the 2 nd

quarter.

Problem 11 38 Common Carriers Tax

Mon Dia operates the Sakayanan Taxi with five units in Cebu
City. During the 4th quarter of 2008, the following taxi units
recorded gross receipts and expenses as follows:

Taxi Units Gross Receipts Gasoline Expense Repairs

1 P100,000 P70,000 P20,000
2 80,000 72,00 2,000
3 95,000 65,000 20,000
4 90,000 50,000 30,000
5 105,000 73,000 4,000

Required: Compute the percentage tax for the 4th quarter.

Problem 11 39 Tax on Goods and Cargoes

Chapter 11 Percentage Taxes 153

Sea Turtle is a common carrier by air. During a particular

quarter, its receipts consist of the following:

Transport of goods P2,500,000

Transport of passengers 5,000,000
Transport of cargoes 3,000,000
Transport of animals 1,500,000

Required: Compute the business tax.

Problem 11 40 Tax on Day/Night Club

Mr. Martin Niko is an operator of a day and nightclub. The clubs

gross receipts for the quarter are as follows:

Admission fee P100,000

Service fee 50,000
Food sales 150,000
Beverage sales 200,000

Required: Compute for the business tax for the quarter.

Problem 11 41 Franchise Tax

The Baguio City Government granted parking franchise to

Jadewell Corporation for a minimum rental fee of P2,000,000 a
year. Jadewell reported the following results of operations during
the year:

Gross receipts P 50,000,000

Operating expenses ( 30,000,000)
Net income P 20,000,000

Required: Compute for the franchise tax of Jadewell.

Problem 11 42 Franchise Tax

Bombo Carabucob is a television-radio station. During a taxable

year, its gross receipts exceeded P10,000,000. For the first
quarter of the succeeding year, it has the following data:

Gross receipts, donation for calamity victims P8,000,000

154 TRANSFER AND BUSINESS TAXATION

Gross receipts, sale of airtime 3,000,000

Gross receipts use of stations communication facilities 4,000,000
Operating expenses 2,000,000

Required: How much is the franchise tax due for the quarter?

Problem 11 43 Tax on Overseas Messages

Baguio Telephone Exchange reported the following gross receipts

for the period:

Billings on services rendered for sending overseas messages

from the Philippines, P500,000.
10% percentage tax collected from customer on top of the
actual cost services rendered.

Required: How much should be the percentage tax to be remitted

by Baguio Telephone Exchange for the above receipts?

Problem 11 44 Tax on Professional Basketball

BBA is a professional basketball organization which reported the

following receipts for the 1st quarter of the year:

Admission fees P 600,000

Share in the TV and Radio coverage receipts 400,000

Required: Compute for the percentage tax payable by BBA.

Problem 11 45 Tax on Cockpit Operations

Magastos operates a cockpit in Malaybalay Bukidnon. Data

shown in its record for a particular quarter are:
Gross Receipts Operating Expenses
Cockpit operation P 800,000 P 50,000
Restaurant operation
Sale of liquor 300,000 100,000
Sale of food 500,000 200,000
Sale of cigarettes 50,000 30,000

Required: How much is the amount of total business taxes?

Problem 11 46 Tax on Winnings

Chapter 11 Percentage Taxes 155

Suga Lero has the following winnings and losses during the year:

Cockfighting P 500,000
Philippine Charity Sweepstakes 2,000,000
Lotto 1,000,000
Horseracing winnings 800,000
Billiard losses 1,000,000
Casino losses 3,000,000

Required: Compute the tax on winnings.

Problem 11 47 Tax on Sale of Shares of Stock

Gigi Nawen sold her 1,000,000 share holdings in the Minex

Corporation on August 15, 2005. She received P497,500 from
Caltas stock broker as proceeds of sale at P0.50 per share,
net of withholding tax on corresponding percentage tax.

Required:
1. Compute for the amount of percentage tax to be remitted by
Caltas stock broker.
2. When should be the last day of remittance without penalty?

Problem 11 48 Gross Receipts Tax

BA Baguio bank has the following income for the first quarter:

Rent income P30,000

Royalty income 20,000
Interest income:
From 5 years loan 50,000
From 2 years loan 20,000
From 1 year loan 10,000

Required: Compute for the total percentage tax for the quarter.

Problem 11 49 Gross Receipts Tax

Achay executed on January 5, 2004 a long-term loan from Bank

Co in the amount of P10,000,000 payable within ten (10) years
with the first installment due on or before January 5, 2005 and
the succeeding yearly installment on the same date of the
subsequent years. Assume that on January 5, 2009, the loan
was preterminated and that the interest paid and other fees
156 TRANSFER AND BUSINESS TAXATION

received from year 2005 up to year 2009 amounting to P200,000

annually were received and declared by Bank Co correctly and the
applicable gross receipts taxes were paid accordingly.

Required: Compute for the following:

1. Gross receipts tax paid
2. Gross receipts tax still due and payable

Problem 11 50 Comprehensive Problem

As a franchisee, Mr. Rob Moratik had the following data on revenues and
receivables, net of taxes:
Receivables
Operations: Revenues Beginning Ending
Franchise operation P3,000,000 P400,000 P100,000
Non-franchise 1,800,000 120,000
operation

Required: Compute the total business taxes assuming that Mr.

Moratik is engaged in:
1. Operating of telephone services.
2. Distributing and selling water.
3. Producing and selling fast-food products.

Problem 11 51 Comprehensive Problem

The following data are shown in the books of account of Dimalugi

Incorporated:

Collections: Current Previous

Revenues P 500,000 P300,000
Accounts receivable 300,000 100,000
Advances 200,000
Bad debts recovery
(previously written off.) 10,000 20,000
Claims from insurance 20,000 5,000
Proceeds of life insurance 1,000,000

The accounts receivable collected during the current period

represents the revenue of the previous period.
Chapter 11 Percentage Taxes 157

Required: Compute the total business taxes for the current and
the previous period assuming that Dimalugi is engaged in:

1. Common carrier of passengers.

2. Race track.
3. Boxing exhibitions.
4. Water utilities.
5. Life insurance.
6. Life insurance as agent of foreign insurance companies.
7. Overseas dispatch from the Philippines.