1.

Which types of businesses are required to pay percentage

tax in the Philippines?
a. Sole proprietorships
b. Partnerships
c. Corporations
d. All of the above

Answer: d. All of the above

2. What is the current VAT rate in the Philippines?

a) 10%
b) 12%
c) 15%
d) 20%

Answer: b) 12%

3. Who is required to register for VAT in the Philippines?

a) Businesses with annual gross sales or receipts
exceeding PHP 3 million
b) All businesses regardless of sales
c) Businesses with annual gross sales or receipts
exceeding PHP 5 million
d) Businesses with annual gross sales or receipts
exceeding PHP 1 million

Answer: a) Businesses with annual gross sales or receipts

exceeding PHP 3 million

4. What is the deadline for filing VAT returns in the

Philippines?
a) 15th day of the month following the end of the
taxable quarter
b) 25th day of the month following the end of the
taxable quarter
c) Last day of the month following the end of the
taxable quarter
d) 10th day of the month following the end of the
taxable quarter

Answer: b) 25th day of the month following the end of the

taxable quarter

5. Can a business claim VAT on expenses incurred before it

was registered for VAT?
a) Yes, as long as the expenses were incurred within
the prescribed period for claiming input VAT
b) No, input VAT can only be claimed on expenses
incurred after registration
c) Only if the expenses were for goods, not services
 d) Only if the expenses were for capital equipment
or property

Answer: b) No, input VAT can only be claimed on expenses

incurred after registration

6. What is the current rate of percentage tax in the

Philippines?
a. 3%
b. 5%
c. 8%
d. 1%

Answer: d. 1%

7. What is the penalty for failing to pay percentage tax on

time in the Philippines?
a. 10% surcharge and 2% interest per month
b. 5% surcharge and 1% interest per month
c. 20% surcharge and 3% interest per month
d. 15% surcharge and 2.5% interest per month

Answer: a. 10% surcharge and 2% interest per month

8. How often do businesses need to file and pay percentage

tax in the Philippines?
a. Annually
b. Quarterly
c. Monthly
d. Biannually

Answer: b. Quarterly

9. What are the penalties for late payment or non-payment of

specific percentage tax in the Philippines?
a) Interest of 20% per annum and surcharge of 25% of
the tax due
b) Interest of 10% per annum and surcharge of 20% of
the tax due
c) Interest of 5% per annum and surcharge of 15% of
the tax due
d) Interest of 15% per annum and surcharge of 30% of
the tax due

Answer: a) Interest of 20% per annum and surcharge of 25%

of the tax due

10. Mr. Andres, VAT-registered real estate dealer,

transferred a parcel of land held for sale to his son as
gift on account of his graduation. For VAT purposes, the
transfer is:
a. not subject to VAT because it is a gift.
b. subject to VAT because it is a deemed sale
 transaction.
c. not subject to VAT because it is subject to gift
tax.
d. subject to VAT because it is considered an actual
sale.

Answer: b. subject to VAT because it is a deemed sale

transaction.

11. Sale of orchids and other ornamental plants is:

a. subject to 12% VAT. c. exempt from VAT.
b. subject to 0% VAT. d. none of the choices

Answer: a. subject to 12% VAT.

12. A VAT-registered taxpayer has the following

transactions during a particular month:
a. Sale of two (2) adjacent condominium units, P2,500,000
b. Sale of one (1) residential lot, P1,500,000
c. Sale of one (1) parking lot in the condominium,
P500,000
d. Sale of fresh fruits, vegetable and fish, P2,000,000

He approaches you to ask how much shall be subject to

VAT. What will your answer be?
a. P4,500,000 c. P500,000
b. P3,000,000 d. None of the choices

Answer: c. P500,000

13.If a VAT-registered person issues a VAT invoice or VAT

official receipt for a VAT-exempt transaction, but fails
to display prominently on the invoice or receipt the
words “VAT-exempt sale”, the transaction shall:
a. still be exempt from value-added tax.
b. become taxable and the issuer shall be liable to
pay VAT thereon.
c. be effectively subject to zero percent.
d. be considered erroneous transaction and must be
disregarded.

Answer: b. become taxable and the issuer shall be liable

to pay VAT thereon.

14. The following are exempt from the VAT, except:

a. Sale of 1 sack of rice. c. Sale of pet
food
b. Sale of lechon manok d. Sale of
newspaper

Answer: c. Sale of pet food

15. 1st Statement - In case of VAT exempt goods sold
locally to a VAT registered customer, the VAT due on such
product shall be allowed as input VAT creditable against
output VAT of the said customer.
2nd Statement – Export sale by a VAT registered person
shall be subjected to the 0% VAT. On the other hand,
export sale by a non-VAT registered person shall be VAT
exempt and subject to the 3% other percentage tax.
a. True, True c. False, False
b. False, True d. True, False

Answer: c. False, False

16. The following transactions are subject to the Value

Added tax, except:
a. Domestic carrier by land with respect to their
gross receipts from the transport of passengers.
b. Domestic carrier by air and sea on their gross
receipt from their transport of passengers from one
place in the Philippines to another place in the
Philippines.
c. Domestic carrier by air and sea on their gross
receipt from their transport of passengers from one
place in the Philippines to another place outside of
the Philippines.
d. Domestic carrier by land with respect to their
gross receipts from the transport of cargoes and
goods.

Answer: a. Domestic carrier by land with respect to their

gross receipts from the transport of passengers.

17. What is percentage tax?

a. Tax imposed on person or business whose annual
sales or receipts do not exceed P3,000,000 per year.
b. Inherent power of the state to extract a
proportional enforced contribution.
c. Tax imposed for special purposes.
d. Tax imposed upon persons liable to pay directly
or bound to pay the tax.

Answer: a. Tax imposed on person or business whose annual

sales or receipts do not exceed P3,000,000 per year.

18.1st Statement – OPT, like VAT, is an excise tax, hence

also a privilege tax.
2nd Statement - A person may be subject to VAT and OPT
on the same transaction.
a. both statements are correct
b. only the first statement is correct
c. both statements are incorrect
d. only the second statement is correct
 Answer: b. only the first statement is correct

19. Which of the following statements is incorrect?

a. taxpayer whose annual gross receipts/sales exceed
P3M shall pay VAT even if he is non VAT- registered
b. A taxpayer whose annual gross receipts/sales do
not exceed P3M but who is VATregistered shall pay
VAT.
c. Percentage tax may be imposed together with VAT.
d. Percentage tax may be imposed together with
excise tax.

Answer: c. Percentage tax may be imposed together with

VAT.

20.1st Statement – A VAT registered person is subject to

VAT regardless of his annual gross sales or receipts.
2nd Statement - A person whose annual gross sales or
receipts does not exceed P100,000 is not subject to VAT
but subject to OPT.
a. only the first statement is correct
b. both statements are incorrect
c. both statements are correct
d. only the second statement is correct

Answer: a. only the first statement is correct

21. One of the following is not subject to the 3%

percentage tax.
a. International air carrier doing business in the
Phils.
b. Domestic carriers and keepers or garage.
c. Franchise grantee of city gas and water utilities
d. International shipping carrier doing business in
the Phils.

Answer: c. Franchise grantee of city gas and water

utilities

22. The percentage tax return is to be filed and paid

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

Answer: b. 25 days after the close of each taxable

quarter.

23. Which of the following business is not subject to

percentage tax?
a. Life insurance companies
 b. Carriers of passengers
c. Carriers of cargoes
d. Sale of shares of stock in PSE

Answer: c. Carriers of cargoes

24. These refers to those persons producing for others

poultry, livestock or other agricultural and marine food
products in their original state?
a. Agricultural contract growers
b. Millers
c. Fishpond operators
d. Agricultural Operators

Answer: a. Agricultural contract growers

25. One of the following is not subject to the 3%

percentage tax
a. International air carrier doing business in the
Philippines
b. International shipping carrier doing business in
the Philippines
c. Domestic carriers and keepers of garage
d. Franchise grantee of the electric utilities

Answer: d. Franchise grantee of the electric utilities

26. A tax on the right or privilege to enter places of

amusement
a. VAT
b. Franchise tax
c. Amusement tax
d. Income tax

Answer: c. Amusement tax

27. Which of the following statements is incorrect?

a. A taxpayer whose annual gross receipts/sales
exceed P3M shall pay VAT even if he is not VAT registered
b. A taxpayer whose annual gross receipts/sales do
not exceed P3M but who is VAT-registered shall pay VAT
c. Percentage tax maybe imposed together with VAT
d. Percentage tax maybe imposed together with excise
tax

Answer: c. Percentage tax maybe imposed together with VAT

28. A tax on business is —

a. Direct tax
b. Indirect tax
 c. Property tax
d. None of the above

Answer: b. Indirect tax

29. Which is not subject to percentage tax?

a. A SE/P who opted to the 8% optional tax
b. A cooperative
c. A small start-up school with gross receipts not
exceeding P3M
d. All of these

Answer: d. All of these

30. Graceis a proprietor of a mini-store with sales in any

12-month period not exceeding P3,000,000. She shall pay
a. Percentage tax
b. VAT
c. Excise tax
d. Percentage tax and Excise tax

Answer: a. Percentage tax

31. Which of the following is subject to percentage tax?

a. Derby winnings
b. Cinema houses
c. Truck for hire
d. Acquisition of insurance from abroad

Answer: d. Acquisition of insurance from abroad

32. Mandatory or voluntary registration as a VAT taxpayer

under the general threshold is
a. Revocable anytime
b. Revocable after the lapse of the three years
c. Revocable within a year
d. Perpetually irrevocable
Answer: b. Revocable after the lapse of the three years

33. Who pays percentage tax

a. Those who exceed the VAT threshold and opt to be
register as non-VAT
b. Those who did not exceed the VAT Threshold but
are registered as VAT taxpayer
c. Only those service providers specifically subject
to percentage tax
 d. Those providers of services specifically subject
to percentage tax and those whose sales or receipts in any
12-month period are below the VAT threshold.

Answer: d. Those providers of services specifically

subject to percentage tax and those whose sales or receipts
in any 12-month period are below the VAT threshold.

34.Which of the following is not correct? The percentage

tax
a. Is a tax on sale or services
b. May be imposed on sales of goods
c. May be imposed together with the value-added tax
d. May be imposed together with excise tax

Answer: C - May be imposed together with the value-added

tax
35. Katrina invested P500,000 in the shares of stock in
Manila Trading Corp. Later she sold the said shares for only
P350,000. The corporation's shares are listed and are traded
in the local stock exchange. The percentage tax on the sale
is:

a. None c.P1,750
b. P2,500 d. P50,000

Answer: B - P2,500 (500,000 x 0.5%)

36. What input taxes may be credited?

a. Input taxes from non-VAT suppliers

b. Input taxes from purchases pf direct labor
c. Input taxes from importation of goods for sale
d. Input taxes from importation of personal and household
effects

Answer: C - Input taxes from importation of goods for sale

37. Statement 1: Senior citizens (SC) are entitled to a 5%

special discount on their purchases of basic and prime
commodities subject to the guidelines of the Department of
Trade and Industry (DTI) and Department of Agriculture (DA).

Statement 2 Persons with disability (PWD) are entitled to a

5% special discount on their purchases of basic and prime
commodities subject to the guidelines of the Department of
Trade and Industry (DTI) and Department of Agriculture (DA).
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct.

Answer : A - Both statements are correct

38. One of the following statements is wrong: Operators of

transport facilities are

a. Subject to the value-added tax on gross receipts from

transporting passengers.
b. Subject to the value-added tax on gross receipts from
transporting goods
c. Subject to percentage tax on gross receipts from
transporting passengers
d. Subject to the value-added tax on gross receipts from
renting out its transportation facilities.

Answer: A; (subject to Section 117)

39. A domestic carrier by land is engaged in the transport of

goods. It is not VAT-registered and its annual gross receipts
do not exceed P3,000,000 during 2020. To what business taxes
is it liable?

a. 12% value-added tax

b. 3% OPT under Section 116
c. 3% common carrier's tax under Section 117
d. Not subject to business tax.

Answer : B

40. ___________ are goods vital to the needs of consumers,

for their sustenance and existence" while prime commodities
are goods that are "essential" to them.

a. basic necessities
b. prime commodities
c. agricultural products
d. marine products

Answer : A - basic necessities

41. Statement 1: Other percentage taxes are indirect taxes

that can be passed on by person required to pay to another
person who shall bear the burden of paying the tax.
Statement 2: Transactions that are subject to the other
percentage taxes are no longer subject to the value-added tax
but may be subject to excise tax.

a. Only statement 1 is correct

b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

Answer: C
0 Statement 1: Business taxes are indirect taxes
0 Statement 2: Sale or Transaction (transaction level
only) = may be subject to either vat OR percentage tax
only + excise tax, if applicable. Taxpayer (entity level:
individuals, corporations, etc.) = may be subject both to
vat and percentage tax + excise tax, if applicable,
provided the taxpayer is engaged in mixed transactions
(vatable business and non-vatable business).

42. Determine the carrier that is subject to the Percentage

Tax:
a. Resident foreign corporation operating as an international
shipping carrier
b. Non-resident foreign corporation operating as an
international air carrier
C. Domestic corporation with international flights
d. Domestic corporation with international voyage

Answer: A. Resident foreign corporation operating as an

international shipping carrier

43. One of the following statements is incorrect: Operators

of transport facilities are:
a. Subject to the value-added tax on gross receipts from
transporting passengers:
b. Subject to the value-added tax on gross receipts from
transporting goods and cargoes.
c. Subject to percentage tax on gross receipts from
transporting passengers.
d. Subject to the value-added tax on gross receipts from
renting out its transportation facilities.

Answer: a. Subject to the value-added tax on gross receipts

from transporting passengers.

44. Which of the following is exempt from VAT?

a. Common carriers transporting passengers by air
within the Philippines
b. Common carriers transporting passengers by sea
within the Philippines
c. Common carriers transporting passengers by land
within the Philippines
d. Common carriers transporting cargoes by air within
the Philippines

Answer: c. Common carriers transporting passengers by

land within the Philippines

45. Which statement is correct about value-added tax

on goods or properties sold?
a. It is based on gross sales and not on net sales.
b. May be due even if the goods or properties were not
actually sold.
c. Does not cover goods exported.
d. It forms part of the selling expense of the trader.

Answer: b. May be due even if the goods or properties were

not actually sold.

46. For value-added tax purposes, which of the

following transactions of a VAT-registered taxpayer may not
be zero-rated?
a. Export sales
b. Foreign currency denominated sales
c. Sale of goods to the Asian Development Bank
d. Sale of goods to an export oriented enterprise

Answer: d. Sale of goods to an export oriented enterprise

47. A subdivision developer sold five (5) residential house
and lots, each to different vendees, for P3,000,000 per
lot, or a total sales of P15,000,000 for the taxable
period. These sales shall be classified as:
a. 12% VAT transactions
b. 0% VAT transactions
c. VAT exempt transactions
d. None of the foregoing

Answer: c. VAT exempt transactions

**3,199,200 each is the threshold

48. CP operated a retail business that had been

generating sales not exceeding the threshold for VAT
exempt persons. However, he desires to be registered
under the VAT system for the first time in order to
benefit from input tax credits. What benefit may CP be
entitled to once he registers under the VAT system?
a. Tax refund
b. Presumptive input tax credit
c. Transitional input tax credit
d. None of the foregoing

Answer: c. Transitional input tax credit

49. What institution is required to deduct and withhold a

final VAT of 5% on the purchase of goods or services subject
to VAT?
a. National government or any political subdivision thereof
b. Government-owned or controlled corporations
c. Both (a) and (b)
d. Neither (a) nor (b)

Answer: c. Both (a) and (b)

50. In the value-added tax on sale of services, the

output tax is computed:
a. On the billings of the month
b. On collections of the month on all billings made
c. On the contract price of contracts completed during
 the taxable period
d. Only and strictly on labor performed under the contract
for services.

Answer: b. On collections of the month on all billings made

51. Which of the following statements is not correct about

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

Answer: b. It is a transfer tax.

52. One of the following is subject to three percent (3%)

percentage tax
a. Establishments whose annual gross sales or receipts exceed
P3,000,000 and who are VAT registered.
b. Businesses whose annual gross sales or receipts exceed
P3,000,000 and who are not VAT registered.
c. VAT registered establishments whose annual gross sales or
receipts do not exceed P3,000,000
d. Establishments whose annual gross sales or receipts do not
exceed P3,000,000 and who are not VAT registered.

Answer: d. Establishments whose annual gross sales or

receipts do not exceed P3,000,000 and who are not VAT
registered.

53. If an entity is vat registered

a. It is subject to 12% vat
b. It is subject to OPT under Section 116
c. It is subject to 12% vat or 3% OPT, at her option
d. It is exempt from OPT under Section 116 if she opted to be
taxed at 8%

Answer: a. She is subject to 12% vat

**The 8% optional tax is not applicable to vat registered
taxpayers.

54. If Ana is a taxi operator

a. She is subject to 12% vat
b. She is subject to common carrier's tax under Section 117
c. She is subject to 12% vat or 3% common carrier's tax, at
her option
d. She is exempt from OPT if is she opted to be taxed at 8%

Answer: b. She is subject to common carrier's tax under

Section 117.
**The 8% optional tax is not applicable to taxpayers who are
subject to OPT other than Section 116 of the Tax Code, as
amended.
55. This refers to persons, corporations, firms or
associations engaged in the business of carrying of
transporting passengers or goods or both, by land, water, and
air, for compensation, offering their services to the public
and shall include transportation contractors.
a. Common carriers;
b. Dealers in securities;
c. Lending investors;
d. Franchise grantees.

Answer: a. Common carriers

56. A non-vat- registered transportation contractor is

engaged in the transport of passengers, goods and cargoes.
What business taxes is he liable for?
a. 12% value-added tax;
b. 3% common carrier's tax;
c. 3% tax on VAT-exempt persons on gross receipts from
transport of goods and cargoes and 3% common carrier's tax on
gross receipts from transport of passengers;
d. 12% VAT on gross receipts from transport of goods and
cargoes and 3% common carrier's tax on gross receipts from
transport of passengers.

Answer: c. 3% tax on VAT-exempt persons on gross receipts

from transport of goods and cargoes and 3% common carrier's
tax on gross receipts from transport of passengers;
**(subject to Section 116 and Section 117)
57. Which of the following statements is correct on
the inventory balance in the financial statements at
any given date of a VAT-registered person?
a. Balance, net of input taxes
b. Balance, inclusive of input taxes
c. Balance on which the transitional input tax is
computed annually
d. Balance where the VAT thereon may be calculated by
multiplying it by 12%

Answer: a. Balance, net of input taxes

58. What is percentage tax?

A. A tax based on a percentage of a company’s income
B. A tax based on a percentage of the selling price of goods
or services
C. A tax based on a percentage of a company’s assets
D. A tax based on a percentage of a company’s expenses

Answer: B. A tax based on a percentage of the selling price

of goods or services

59. Who is liable to pay percentage tax?

A. Individuals
B. Corporations
C. Self-employed professionals
D. All of the above
Answer: D. All of the above

60. Which of the following is not subject to percentage tax?

A. Sale of goods or properties
B. Sale of services
C. Importation of goods
D. All of the above are subject to percentage tax

Answer: D. All of the above are subject to percentage tax

61. What is VAT?

A. A tax levied on the income of individuals and corporations
B. A tax levied on the sale of goods and services
C. A tax levied on the importation of goods
D. A tax levied on the transfer of real property

Answer: B. A tax levied on the sale of goods and services

62. What is the current VAT rate in the Philippines?

A. 3%
B. 5%
C. 10%
D. 12%

Answer: D. 12%

63. What types of transactions are subject to VAT in the

Philippines?
A. Sale of goods and properties
B. Sale of services
C. Importation of goods
D. All of the above

Answer: D. All of the above

64. Who is required to register for VAT in the Philippines?

A. All individuals who sell goods and services
B. All corporations who sell goods and services
C. All individuals and corporations whose gross annual sales
or receipts exceed Php 3,000,000
D. All individuals and corporations whose gross annual sales
or receipts exceed Php 1,919,500

Answer: C. All individuals and corporations whose gross

annual sales or receipts exceed Php 3,000,000

65. What is the difference between VAT and percentage tax?

A. VAT is a tax on the value-added at each stage of
production and distribution, while percentage tax is a tax on
gross sales or receipts.
B. VAT is a tax on gross sales or receipts, while percentage
tax is a tax on the value-added at each stage of production
and distribution.
C. VAT and percentage tax are the same thing.
D. Neither VAT nor percentage tax are applicable in the
Philippines.

Answer: A. VAT is a tax on the value-added at each stage of

production and distribution, while percentage tax is a tax on
gross sales or receipts.

66. What are the consequences of failing to register for VAT

in the Philippines?
A. The taxpayer will be liable to pay a penalty of Php 1,000
for every year of non-registration.
B. The taxpayer will be barred from engaging in any business
activity.
C. The taxpayer will be required to pay VAT on all their
sales from the time they should have registered.
D. All of the above.

Answer: C. The taxpayer will be required to pay VAT on all

their sales from the time they should have registered

67. Cantor is a VAT-registered manufacturer of liquors. On

his sales in the Philippines, his tax is:
A. Excise Tax
B. Value-Added Tax
C. Percentage Tax
D. A and B
Answer: D. A and B

68. Which statement is wrong? Value-added tax on importation

of goods:
A. Is imposed on an importation for sale or for use in
business.
B. Is imposed on importation for personal use.
C. Should be paid prior to removal from customs custody.
D. Is not available as input tax even if related to
business.

Answer: D. Is not available as input tax even if related to

business.

69. Alamid exported cigarettes to taiwan for sale. He is

subject to the value-added tax. He is also subject to the
business tax of:
A. Excise Tax
B. Income Tax
C. Percentage Tax
D. None of these
Answer: D. None of these

70. When to file VAT return?

A. Monthly
B. Quarterly
C. Yearly
D. Weekly
Answer: B. Quarterly

71. Sale of orchids by a flower shop which raises its flower

in Tagaytay is subject to:
A. 12% VAT
B. 0% VAT
C. Exempt from VAT
D. None of the above

Answer: A. 12 %VAT

72.Who is the one statutorily liable for the payment of VAT?

A. Consumer
B. Buyer
C. Seller
D. Buyer or Seller

Answer: C. Seller

73. Registration of taxpayers under the VAT system may be

classified as, except
A. Mandatory VAT registration
B. Option Vat Registration
C. Mixed VAT Registration
D. None of the above
Answer: C. Mixed VAT Registration

74. What types of transactions or activities are typically

subject to percentage tax?
a) Sales of real estate
b) Sales of goods and services
c) Investments
d) Employment income

Answer: b) Sales of goods and services

75. How is the percentage rate for a particular tax

determined?
a) Based on the price of the product or service
b) Based on the volume or quantity of the product or service
c) Based on the seller's profit margin
d) Based on government policy

Answer: a) Based on the price of the product or service

76. How does percentage tax differ from value-added tax (VAT)
or sales tax?
a) Percentage tax is calculated as a percentage of the
product price, while VAT and sales tax are added to the
price.
b) Percentage tax is only imposed on certain products, while
VAT and sales tax are imposed on most products.
c) Percentage tax is a fixed percentage, while VAT and sales
tax may vary depending on the product or service.
d) Percentage tax is only imposed on goods, while VAT and
sales tax are imposed on goods and services.

Answer: a) Percentage tax is calculated as a percentage of

the product price, while VAT and sales tax are added to the
price.

77. What is a potential benefit of using percentage tax as a

means of generating revenue?
a) It is easy to enforce and collect
b) It encourages people to consume more products
c) It does not affect the price of the product
d) It is generally more efficient than other types of taxes

Answer: d) It is generally more efficient than other types of

taxes

78. How does percentage tax affect the price of goods and
services?
a) It increases the price of goods and services
b) It decreases the price of goods and services
c) It has no effect on the price of goods and services
d) It depends on the product or service

Answer: a) It increases the price of goods and services

79. What is the purpose of a percentage tax?

a) To discourage certain types of transactions
b) To generate revenue for the government
c) To promote economic growth
d) To punish people for their spending habits

Answer: b) To generate revenue for the government

80. What is the difference between a percentage tax and a

sales tax?
a) A percentage tax is applied to the price of a product or
service, while a sales tax is added on top of the price
b) A percentage tax is only applied to certain products or
services, while a sales tax is applied to all products and
services
c) A percentage tax is a fixed percentage, while a sales tax
can vary depending on the product or service
d) There is no difference between a percentage tax and a
sales tax
Answer: a) A percentage tax is applied to the price of a
product or service, while a sales tax is added on top of the
price

81. In the case of importation of taxable goods, who shall be

liable to VATE
a. Importer, whether an individual or corporation and whether
or not made in the course of his trade or business
b. Importer if made in the course of trade or business only
c. Importer if corporation and only when made in the course
of trade or business
d. None of the choices business

Answer: A. Importer, whether an individual or corporation and

whether or not made in the course of his trade or business

82. One of the following is not a major business internal

revenue tax in the Tax Code.

a. VAT
b. Excise tax
c. income tax
d. Percentage tax

Answer: c. income tax

83. The account title to best reflect the VAT on a purchase:

a. Sales tax payable

b. VAT payable
c. Input tax.
d. Output tax

Answer: c. Input tax

84. Georgia Baby is an operator of parking lots. What

business tax is due on his income from the business?

a. Broker's tax
b. Caterer's tax
c. Common camer's tax
d. Value-added tax

Answer: d. Value-added tax

85. Value-Added Tax

A. Is an Indirect national tax levied on the value added in
the production of a good (or service) as it moves through the
venous stages of production.
B. Is an ad valorem tax.
C. Is preferred in place of a personal Income tax by many
economists because income taxes are a disincentive to work,
where as vat discourages unnecessary consumption.
D. All of the above.

Answer: D. All of the above.

86. Which of the following carrier shall be subject to value-

added tax?
A. Sea earner classified as Resident Foreign Corporation,
with annual gross receipts of 2,000,000.
B. Air carrier classified as Resident Foreign Corporation,
with annual gross receipts of
3,000,000.
C. Sea carrier classified as Domestic Corporation, voyage is
from Philippines to Japan, worth annual gross receipts of
5,000,000.
D. None of the choices.

Answer: C. Sea carrier classified as Domestic Corporation,

voyage is from Philippines to Japan, worth annual gross
receipts of 5,000,000.

87. Which of the following statements is not correct about

percentage tax?
A. It is a business tax.
B. It is a transfer tax.
C. It is an ad valorem tax.
D. It is not a progressive tax.

Answer: B. It is a transfer tax.

88. A seller of agricultural food products is vat-exempt. His

annual gross sales in 2022 amounted to 3,000,000. To what
business tax is he liable?
A. 3% tax on vat-exempt persons under Section 116 of the Tax
Code.
B. 12% value-added tax.
C. 3% common carrier's tax under Section 117 of the tax code.
D. None of the above.

Answer: D.None of the above.