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Other Percentage Tax Exercises buses ply the route Naga City to Legaspi City,
and vice versa. During the month, he decided to
1. A tax on business is stop the operation of one unit to undergo two
a. Direct tax b. Indirect tax weeks engine overhaul. Thus, his total gross
c. Property tax d.None of the above receipts during the month amounted to
2. Which of the following taxes is not replaced by 110,000 only. Malakas is-
VAT? a. Subject to income tax but exempt from
a. Common carriers’ tax percentage tax
b. Sales tax on original sales b. Subject to value-added tax if the gross
c. Contractor’s tax annual receipts exceed 3,000,000.
d. Compensating tax c. A marginal income earner and therefore,
3. One of the following is subject to 3% exempt from common carrier’s tax and VAT
percentage tax d. Subject to common carrier’s tax of 3,300
a. Establishment whose annual gross sales or
receipts exceed 3,000,000 and who are VAT 9. Sako Company is a holder of a franchise to
registered. operate five units of passenger buses (seating
b. Business whose annual gross receipts or capacity is 44 passengers) in the Bicol Region. It
sales exceed 3,000,000 and who are not also owns a gas station which is used exclusively
VAT registered. to load its buses with diesel fuels, and a garage
c. VAT registered establishments whose with service shop exclusively to its own buses
annual gross receipts do not exceed although in rare instances it is accepting repair
3,000,000 jobs from outsiders. During the month of
d. Establishments whose annual gross sales do December, it had the following gross receipts:
not exceed 3,000,000 and who are not VAT From the buses 280,000
registered. From the gas station (in loading its 300,000
4. Tin is the owner of a small grocery store with own buses)
gross sales in any one year period that do not From the garage 12,000
exceed 3,000,000. She is not a VAT registered
taxpayer. She submits the following data for the How much is the common carrier’s tax payable?
month of January, 2008. a. 17,760 b. 8,400
Merchandise Inventory, Dec 31, 2007 123,450 c. 8,760 d. 17,400
Gross sales 67,800
Purchases from VAT registered 156,980
suppliers 10. The franchise tax on grantees of radio and
television broadcasting companies whose
The percentage tax due is annual gross receipts in any year do not exceed
a. 34,823 b. 6,780 10,000,000 shall be
c. 2,034 d. 9.876 a. 1% of gross receipts
b. 2 % of gross receipts
c. 3 % of gross receipts
Rustico owns a small eatery near a trimobile parking d. 4 % of gross receipts
area. Its annual gross receipts range from 400,000 to
450,000. In January, the gross receipts amounted to
27,500 while purchases of goods subject to VAT is 6,000 Radio Station DWLAA has an annual gross
and not subject to VAT, 13,000. receipts ranging from 4,000,000 to 5,000,000.
5. If Rustico is not a VAT registered taxpayer, his During the month, it had a gross receipts from
percentage tax due for the month is advertisements of 330,000 (net of tax), while
a. 12,000 b. 1,900 the disbursements subject to VAT amounted to
c. 825 d. 2,500 224,000, inclusive of tax
6. One of the following is subject to common 11. The franchise tax payable by DWLAA is
carrier’s tax a. 30,000 b. 9,900
a. Autocalesa c. 50,000 d. 10,000
b. Carrier which transports its own cargo
c. Owners of banca Too Big Company, a public service company, is a
d. Trimobile/tricycle holder of a franchise to engage in the business
7. All of the following, except one, are not subject of supplying water to several towns and cities in
to common carrier’s tax Luzon. As recorded in its books during the
a. Owner of a parking lot/building month, its total gross receipts from the sale of
b. Rent-a-car companies water amounted to 2,550,000, while the
c. Common carriers by land engaged in receipts from rental of equipments and other
carriage of goods or cargo services was 280,000. The operating expenses
d. Airline companies amounted to 2,000,000; 11% of which was paid
8. Malakas owns two passenger buses. Each bus to VAT registered persons.
has a seating capacity of 45 passengers. The
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12. The percentage tax due is 20. Carlos operates the El Combo Nightclub along
a. 51,000 b. 5,000 Malate Avenue, Palayan City. His gross receipts
c. 16,500 d. 56,500 in February 2008 amounted to 126,700. The
foods and drinks being served inside the
13. One of the following is subject to percentage nightclub are being delivered by Tiberio, a
tax nonVAT taxpayer. During the month, Tiberio
a. Long distance call by a son from Sta. Cruz, sold 32,400 worth of goods and drinks to Carlos.
Manila to his father in Ilo Ilo City
b. Monthly telephone bill from PLDT The amusement tax payable is
c. Telephone bill on a call by a mother in the a. 19,005 b. 22,806
Philippines to her son in the United States. c. 28,638 d. 5,832
d. Telephone call by Magda in Hong Kong to
her friend in Manila. 37-38

14. Balatan Telephone Company (BATELCO) had the Sogo Hotel offers the following services to its
following collections from its customers during guests and from which revenues were derived
the quarter: for the month, as follows:
Regular monthly bills 770,000 Revenues Collections
Domestic calls 501,600 Hotel rooms 1,250,000 984,000
Overseas calls (outgoing) 533,500 Dining Hall:
Sale of foods and 940,000 860,000
The percentage tax to be remitted by BATELCO refreshments
during the quarter is Sale of wine, beer 780,000 620,000
a. 73,600 b. 48,500 and liquors
c. 53,350 d. 80,960 Disco:
Admission fee 25,000 15,000
15. Admission fees to cockpits and race tracks are Sale of foods and 250,000 115,000
subject to drinks
a. Tax on paid admission Sale of wines , beer 650,000 540,000
b. Tax on winnings and liquor
c. Tax on gross receipts
d. None of the above 21. The amusement tax due is
a. 110,700 b. 120,600
Rose Tear operates a cockpit in Zamboanga c. 552,240 d. 386,640
City. Inside the cockpit is a restaurant which she 22. If Sogo Hotel is subject to VAT, the output tax
operates. The data during the month are as thereon is (assume that the amounts are tax
follows: inclusive)
Gross receipts from the gates 390,000 a. 295,680 b. 264,000
Receipts from advertisements inside 15,000 c. 218,000 d. 120,600
the cockpit arena 23. Boy Cali is the operator of Cali Coliseum. During
Gross receipts from restaurant: the month, it had the following gross receipts
Sale of food and softdrinks 21,000 from various activities, to wit:
Sale of liquor 33,000 Concert by Chabel Balyeno 85,000
Disbursements (subject to VAT) 24,200 Professional basketball 120,000
Disbursements (not subject to VAT) 12,000 Amateur basketball 36,700
Billiard 45,000
16. The amusement tax due is
a. 82,620 b. 81,828 The percentage tax payable by Boy Cali on the
c. 72,900 d. 19,980 Coliseum is
17. Suppose the restaurant is owned and operated a. 18,000 b. 23,505
by Mon, a non VAT registered person, the c. 43,005 d. 24,750
business tax payable by Mon is 24. In number 39, assuming that other than the
a. 1,260 b. 534 enumerated events therein a world
c. 4,909.09 d. 1,620 championship boxing fight between
18. Suppose the restaurant is operated by Mon, the Namacquiao and Nakoto, American and
percentage tax due on Rose is Mexican, respectively, in light weight division
a. 3,300 b. 12,150 was held in Cali Coliseum during the month and
c. 92,700 d.72,900 the total gross receipts was 780,000, the total
19. Assume that Mon, a VAT registered taxpayer is amusement tax payable is
operating the restaurant. The business tax a. 135,000 b. 96,000
payable by Mon is c. 43,005 d. 160,005
a. 81,600 b. 3,576
c. 4,909.09 d. 2,709.09
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25. Paiyakan Insurance Company, a domestic


corporation, had the following collections from The percentage tax due on the above
insurance premiums during the month: transaction is
Health and accidental insurance 2,340,000 a. 1,667 b. 1,048.65
Motor Vehicle insurance 1,250,000 c. 1,093.85 d. 1,668.10
Life and disability insurance 1,850,000 31. Tiwala had the following transactions of shares
Property insurance 2,840,000 of stock:

The percentage tax due is Selling Cost


a. 92,500 b. 414,000 Price
c. 272,000 d. 209,500 Sales:
Stick-to-1 Corporation, 32,450 31,980
42-43 not traded
Di-Man-Lolo-Co 69,780 64,321
Madulag Insurance Company had the following Corporation, traded
data on collections of premiums and Di-Flirt Corporation, 123,820 98,760
disbursements during the month: traded
Life Non life
insurance insurance Purchases:
Cash collections 150,000 145,700 Titig Corporation, not 32,415
Checks 45,000 34,600 traded
Accounts receivable 25,200 58,900 Kilig corporation, traded 48,657

Payments of 43,000 The total percentage tax on the above


expenses to VAT transaction is
businesses a. 1,130.25 b. 724.89
Payments of 35,000 c. 968.00 d. 815.40
expenses to nonVAT 32. Mahal owns shares of stock of domestic
businesses corporations which are actively traded in the
PSE. Due to the unstable prices in the stock
The amounts indicated pertaining to VAT exchange, he decided to sell the shares to the
transactions do not include the VAT. public. The data of which are as follows:
26. The percentage tax due is Selling Cost Gain/Loss
a. 8,000 b. 9,750 Price
c. 11,010 d. 9,015 Yabs 230,000 220,000 10,000
27. The VAT payable is Corporation
a. 16, 476 b. 9,750 Besi 360,000 395,000 (35,000)
c. 28,704 d. 63,730 Corporation
28. Which of the following is not considered as a
percentage tax? The stock transaction tax is
a. ½ of 1% stock transaction on shares traded a. 2,950 b.1,150
through the local stock exchange c. 50 d. Zero
b. 10% -20% tax on shares not traded through 33. Tol Corporation, a closely held corporation
the local stock exchange decided to open itself to the public. The initial
c. 10% overseas communication tax offering of its shares had a selling price of
d. 3% tax on keepers of garage 6,250,000 which is 22.5% of its total
29. Bayani’s ticket (daily double) won 42,000, gross outstanding shares after the listing in the local
of withholding tax and cost of ticket, in a horse stock exchange. The percentage tax due is
race in Vice Ganda Hippodrome. His ticket had a. 31, 250 b. 125,000
cost him 250. How much tax was withheld on c. 1,406,250 d. 250,000
winnings in horse races by Bayani? 34. Gross receipts tax is business tax paid by a
a. 1,680 b. 4,200 a. Hotel operator
c. 1,670 d. 4,175 b. Insurance Company
30. Campos sold the following shares of stock thru c. Franchise Holder
his stock broker: d. Bank
Selling Market 35. Superbank has the following income/loss for
Price Value the months of March and April:
Ex Company, not 123,670 114,850
traded March April
Way Company, 65,980 62,540 Interest income maturity 50,000 100,000
traded of less than 5 years
See Company, 143,750 156,230 Rentals 50,000 50,000
traded Net trading gain/loss (10,000) 20,000
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c. 250,000; 550,000 d. 250,000; 300,000


The gross receipts taxes payable for March and 38. If the shares were offered at 1.50 per share,
April, respectively how much is the tax due on the primary
a. 5,000;8,500 b. 6,000;9,900 offering?
c. 6,000;9,200 d. 5,300;9,200 a. 3,750 b. 6,750
36. An offering of shares to the investing public c. 15,000 d. 7,500
subsequent to an initial public offering 39. Who is the taxpayer as far as the IPO in the local
a. Secondary offering stock exchange of closely held corporations is
b. Primary offering concerned?
c. Follow on/ Follow through offering a. The purchaser of shares of stock offered in
d. Follow up offering the IPO
b. The corporate issuer
53-58 c. The corporate purchaser
Bosz Corporation, a closely held corporation, d. The local stock exchange
has an authorized capital stock of 1,000,000 40. If the shares of Yabidabs were also offered at
shares with par value of 1.00/share as of Jan 1, 1.50 per share, how much is the total tax on the
2008. Of the 1,000,000 authorized shares, IPO?
250,000 thereof is subscribed and fully paid up a. 3,000 b. 3,750
by the following stockholders: c. 6,750 d. None
Mars 50,000 41. If in June 2008, Bosz Corporation again decides
Beh 50,000 to increase capitalization by offering another
Yabidabs 50,000 30,000 of unissued shares to the public at
Yeepeeh 50,000 P2/share, such follow on/follow through shall
Kulasa 50,000 be exempt from
Total shares outstanding 250,000 a. Percentage tax and documentary stamp tax
b. Documentary stamp tax but not percentage
Bosz Corporation finally decides to conduct an tax
IPO and initially offers 250,000 of its unissued c. Percentage tax but not documentary stamp
shares to the investing public. After the IPO in tax
March 2008, Bosz Corporation’s total issued d. Neither percentage tax nor documentary
shares increased from 250,000 to 500,000. stamp tax
42. In case Yeepeeh decides to offer his existing
At the IPO, one of the existing shareholders, 50,000 shares to the public subsequent to IPO
Yabidabs, has likewise decided to sell his entire at P2/share, the percentage tax shall be
50,000 to the public. a. 25
37. How many shares have been offered in the b. 500
primary offering? In the secondary offering? c. 300
a. 1,000,000; 250,000 b. 250,000; 50,000 d. 4,000

True or false
1. A small business enterprise with a gross receipts of not exceeding 1.5 million may be taxed at 12% (VAT) or
3 % (non-vat) at the option of the taxpayer.
2. Clubs and caterers are subject to amusement tax.
3. A radio station with an annual gross receipts of 2,000,000 but voluntarily subjects itself to VAT can never
cancel its registration and revert back to Franchise Tax even if it later on decides to abandon VAT.
4. Taxpayers which are subject to other percentage taxes are generally required to file its tax return within 20
days after the end of each month.
5. The sale of listed and traded shares of stocks after the initial public offering is exempt from business tax.
6. The 30% amusement tax on jai alai has been abolished when the fronton has been ordered closed by the
government.
7. Pedicab (padyak) operators, being engaged in the carriage of passengers, are subject to common carriers
tax.
8. The term “gross annual sales” has no relation to profit; it means actual sales without deduction of expenses.
9. The term “gross annual sales” includes cash sales and credit sales less sales returns, allowances and
discounts
10. When the restaurant is maintained within the premises or compound of a night club, the gross sales of such
restaurant is subject to VAT.
11. The gross sales of a bar inside a passenger ship is subject to amusement tax of 18%.
12. Service charge which nightclubs collect from their customers, and represented as charges in lieu of cash tip
to the employees are included in the term “gross receipts” which are subject to amusement tax.
13. If there are vending machines installed by coca-cola inside the premises of race tracks, the sales affected in
the vending machines shall be subject to Amusement tax of 30%.
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14. The gross receipts of a bank which operates a canteen where foods are served at subsidized prices
exclusively to its employees is subject to Tax on banks notwithstanding the fact that the canteen is operated
on a non-profit basis.
15. A private carrier which undertakes to deliver goods at a particular place without being bound in law to
undertake such transportation and does not bind himself out to the public is subject to 3% common carriers’
tax.
16. The commission of bus drivers and conductors are not deductible in computing gross receipts.
17. Trimobiles are not covered by the minimum monthly gross receipts on common carriers.
18. When preferred shares are redeemed for cancellation or retirement when the corporation is still in its
“going concern” the capital gain shall be subject to regular income tax rates.
19. The wash sale provision does not apply in the case of dealer in stock if the sale or other disposition of stock
is made in the ordinary course of business of such dealer.
20. Amounts paid for messages transmitted by an Embassy to their own country are exempt from Overseas
Communication Tax.
21. The 5% Premium Tax on insurance company is based on gross premiums received less returned premiums
and reinsurance premiums ceded.
22. The gross receipts of a cabaret does not include the dance fee that is charged by cabaret as compensation
for its “bailarinas”.
23. The stock transaction of ½ of 1% is payable by the seller of the stocks even if he suffers loss on the sale.
24. For purposes of IPO tax, the term “closely held corporation” means any corporation at least 50% in value of
the outstanding capital stock or at least 50% of the total combined voting power of all classes of stock
entitled to vote is owned directly or indirectly by or for not more than five individuals.
25. Excise tax as a classification of tax is the same as the excise tax o business.

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