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Other Percentage Tax Exercises1. A tax on business isa. Direct tax b. Indirect taxc. Property taxd.None of the above

2. Which of the following taxes is not replaced by VAT?

a. Common carriers tax

b. Sales tax on original sales

c. Contractors tax

d. Compensating tax

3. Given the following establishments:

I. Cebu Pacific Air

II. Pegasus nightclub

III. Camarines Sur III Electric Cooperative (CASURECO III)

IV. Banco de Oro (Unibank)

Which of the above establishments is/are subject to other percentage tax?

a. II onlyb. II and III

c. III and IV

d. II and IV

4. One of the following is subject to 3% percentage tax

a. Establishment whose annual gross sales or receipts exceed 1,500,000 and who are VAT registered.

b. Business whose annual gross receipts or sales exceed 1,500,000 and who are not VAT registered.

c. VAT registered establishments whose annual gross receipts do not exceed 1,500,000

d. Establishments whose annual gross sales do not exceed 1,500,000 and who are not VAT registered.

5. Maurot owns the following business/establishments:

Annual Gross receipts

I.Restaurant1,350,000

II.Barbershop625,000

III.Seller of Agricultural food products1,875,000

Which combination will subject Maurot to VAT?a. I only

b. I and IIc. I, II and IIId. None

6. Tin is the owner of a small grocery store with gross sales in any one year period that do not exceed 1,500,000. She is not a VAT registered taxpayer. She submits the following data for the month of January, 2008.

Merchandise Inventory, Dec 31, 2007123,450

Gross sales67,800

Purchases from VAT registered suppliers156,980

The percentage tax due isa. 34,823b. 6,780c. 2,034

d. 9.876

7 to 8

Rustico owns a small eatery near a trimobile parking 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 and not subject to VAT, 13,000.

7. If Rustico is not a VAT registered taxpayer, his percentage tax due for the month isa. 12,000b. 1,900c. 825

d. 2,500

8. Assuming that rustico is a VAT registered taxpayer and the amounts indicated are exclusive of VAT, the VAT due isa. 12,000b. 1,900c. 2,580

d. 2,500

9. One of the following is subject to common carriers tax

a. Autocalesa

b. Carrier which transports its own cargo

c. Owners of banca

d. Trimobile/tricycle

10. All of the following, except one, are not subject to common carriers tax

a. Owner of a parking lot/building

b. Rent-a-car companies

c. Common carriers by land engaged in carriage of goods or cargo

d. Airline companies11. Gadil operates 2 pedicabs, 2 passenger jeepneys plying the route Divisoria-Morayta in Manila, and three cargo trucks. The gross receipts for the month are:

Jeepney No. 122,000Truck No. 17,250

Jeepney No. 223,300Truck No. 28,500

Pedicab No. 1800Truck No. 314,000

Pedicab No. 21,000

The percentage tax due on Gadil isa. 831

b.795c. 1,359

d. 1,413

12. Malakas owns two passenger buses. Each bus has a seating capacity of 45 passengers. The buses ply the route Naga City to Legaspi City, and vice versa. During the month, he decided to stop the operation of one unit to undergo two weeks engine overhaul. Thus, his total gross receipts during the month amounted to 110,000 only. Malakas is-

a. Subject to income tax but exempt from percentage tax

b. Subject to value-added tax if the gross annual receipts exceed 1,500,000.

c. A marginal income earner and therefore, exempt from common carriers tax and VAT

d. Subject to common carriers tax of 3,300

No. 13-14

Salawahan Transport Company is a transportation contractor. During the month, it had the following gross receipts:

From transport passengers485,000

From transport cargo220,000

From rental of its cargo-trucks to individual lessees33,000

From rental of its rent-a-car tp balikbayans (with chauffer30,000

Payments to VAT registered persons during the month amount to 99,000.

13. The percentage tax due isa. 22,740

b.21,150c. 7,590

d. 15,450

14. Assuming that the amounts given do not include the tax, the VAT due is-a. 23,000

b.18,480c. 59,909

d. None

15. Sako Company is a holder of a franchise to operate five units of passenger buses (seating capacity is 44 passengers) in the Bicol Region. It also owns a gas station which is used exclusively to load its buses with diesel fuels, and a garage with service shop exclusively to its own buses although in rare instances it is accepting repair jobs from outsiders. During the month of December, it had the following gross receipts:

From the buses280,000

From the gas station (in loading its own buses)300,000

From the garage12,000

How much is the common carriers tax payable?a. 17,760b. 8,400c. 8,760

d. 17,400

16-17

Luigi Lines, engaged in provincial operation, has the following gross receipts in February:

Bus 1 (carriage of goods, 8,000)100,000

Bus 2 (carriageof goods, 3,500)65,000

Salaries of drivers and conductors25,000

Cost of oil and engine160,000

Taxi30,000

Jeepney22,000

Cargo Truck45,000

Sea Vessel250,000

During the month, Bus 1 was bumped by another bus owned by Tulak Lines and paid Luigi Lines P20,000 for the damage done.

16. The percentage tax due on Luigi Line in February is:a. 6,180

b. 6,165c. 14,430d. 5,730

17. The output tax on Luigi Lines isa. 37,380b. 31,150c. 33,375d. 36,78018-19

Love Bus Company operates 10 units of buses. During the month, it had the following data in its books:

Receipts from passengers2,000,000

Receipts from cargoes500,000

Receivable from transport of passengers15,000

Receivable from transport of cargoes5,000

Payments for repair of transport units30,000

Salaries of personnel300,000

Purchase of spare parts60,000

Registration with LTO10,000

Premiums on insurance15,000

18. How much is the percentage tax payablea. 60,000b. 60,450c. 39,000d. None

19. How much is the VAT payablea. 39,600b. 43,800c. 39,000d. 57,48020. Common Carrier 1: Domestic sea or air carriers for passengers or cargoes.

Common Carrier 2: International sea or air carriers for passenger or cargoes.

What is the respective business tax rate on the common carriers identified above if they travel from the Philippines to a foreign country?

Common Carrier 1Common Carrier 2

a.0%3 %

b.3%3 %

c.0%0 %

d.12%3 %

21. The franchise tax on grantees of radio and television broadcasting companies whose annual gross receipts in any year do not exceed 10,000,000 shall be

a. 1% of gross receipts

b. 2 % of gross receipts

c. 3 % of gross receipts

d. 4 % of gross receipts

22-23

Radio Station DWLAA has an annual gross receipts ranging from 4,000,000 to 5,000,000. During the month, it had a gross receipts from advertisements of 330,000 (net of tax), while the disbursements subject to VAT amounted to 224,000, inclusive of tax

22. The franchise tax payable by DWLAA isa. 30,000b. 9,900c. 50,000d. 10,000

23. How much s the VAT payable if it is registered under the VAT system?a. 10,000b. 9,900c. 11,357d. 15,60024-25

Too Big Company, a public service company, is a holder of a franchise to engage in the business of supplying water to several towns and cities in Luzon. As recorded in its books during the month, its total gross receipts from the sale of water amounted to 2,550,000, while the receipts from rental of equipments and other services was 280,000. The operating expenses amounted to 2,000,000; 11% of which was paid to VAT registered persons.

24. The percentage tax due isa. 51,000b. 5,000c. 16,500d. 56,500

25. The VAT payable for the month isa. 33,600b. 5,000c. 16,500d. 7,20026. One of the following is subject to percentage taxa. Long distance call by a son from Sta. Cruz, Manila to his father in Ilo Ilo City

b. Monthly telephone bill from PLDT

c. Telephone bill on a call by a mother in the Philippines to her son in the United States.

d. Telephone call by Magda in Hong Kong to her friend in Manila.

27. Balatan Telephone Company (BATELCO) had the following collections from its customers during the quarter:

Regular monthly bills770,000

Domestic calls501,600

Overseas calls (outgoing)533,500

The percentage tax to be remitted by BATELCO during the quarter isa. 73,600b. 48,500c. 53,350d. 80,960

28-30

Makasalanan Corporation had the following data during the month of February:

Net income during the month40,000

Collections during the month

From services rendered in Jan50,000

From services rendered in Feb300,000

From services to be performed in march (advances)10,000

28. The business tax payable if Makasalanan is a bus company:a. 12,000b. 22,800c. 10,800d. 21,000

29. The business tax payable if Makasalanan is a cabaret:a. 64,000b. 64,800c. 72,000d.136,800

30. The business tax payable if Makasalanan is a race track:a. 120,000b. 228,000c. 210,000d. 108,00031. Admission fees to cockpits and race tracks are subject to

a. Tax on paid admission

b. Tax on winnings

c. Tax on gross receipts

d. None of the above

32-35

Rose Tear operates a cockpit in Zamboanga City. Inside the cockpit is a restaurant which she operates. The data during the month are as follows:

Gross receipts from the gates390,000

Receipts from advertisements inside the cockpit arena15,000

Gross receipts from restaurant:

Sale of food and softdrinks21,000

Sale of liquor33,000

Disbursements (subject to VAT)24,200

Disbursements (not subject to VAT)12,000

32. The amusement tax due isa. 82,620b. 81,828c. 72,900d. 19,980

33. Suppose the restaurant is owned and operated by Mon, a non VAT registered person, the business tax payable by Mon isa. 1,260

b. 534c. 4,909.09d. 1,62034. Suppose the restaurant is operated by Mon, the percentage tax due on Rose isa. 3,300

b. 12,150c. 92,700d.72,90035. Assume that Mon, a VAT registered taxpayer is operating the restaurant. The business tax payable by Mon is a. 81,600b. 3,576c. 4,909.09d. 2,709.09

36. Carlos operates the El Combo Nightclub along Malate Avenue, Palayan City. His gross receipts in February 2008 amounted to 126,700. The foods and drinks being served inside the nightclub are being delivered by Tiberio, a nonVAT taxpayer. During the month, Tiberio sold 32,400 worth of goods and drinks to Carlos.

The amusement tax payable isa. 19,005b. 22,806c. 28,638d. 5,832

37-38

Sogo Hotel offers the following services to its guests and from which revenues were derived for the month, as follows:

RevenuesCollections

Hotel rooms1,250,000984,000

Dining Hall:

Sale of foods and refreshments940,000860,000

Sale of wine, beer and liquors780,000620,000

Disco:

Admission fee25,00015,000

Sale of foods and drinks250,000115,000

Sale of wines , beer and liquor650,000540,000

37. The amusement tax due isa. 110,700b. 120,600c. 552,240d. 386,640

38. If Sogo Hotel is subject to VAT, the output tax thereon is (assume that the amounts are tax inclusive)a. 295,680b. 264,000c. 218,000d. 120,600

39. Boy Cali is the operator of Cali Coliseum. During the month, it had the following gross receipts from various activities, to wit:

Concert by Chabel Balyeno85,000

Professional basketball120,000

Amateur basketball36,700

Billiard45,000

The percentage tax payable by Boy Cali on the Coliseum isa. 18,000b. 23,505c. 43,005d. 24,750

40. In number 39, assuming that other than the enumerated events therein a world championship boxing fight between Namacquiao and Nakoto, American and Mexican, respectively, in light weight division was held in Cali Coliseum during the month and the total gross receipts was 780,000, the total amusement tax payable isa. 135,000b. 96,000c. 43,005d. 160,005

41. Paiyakan Insurance Company, a domestic corporation, had the following collections from insurance premiums during the month:

Health and accidental insurance2,340,000

Motor Vehicle insurance1,250,000

Life and disability insurance1,850,000

Property insurance2,840,000

The percentage tax due isa. 92,500b. 414,000c. 272,000d. 209,50042-43

Madulag Insurance Company had the following data on collections of premiums and disbursements during the month:

Life insuranceNon life insurance

Cash collections 150,000145,700

Checks45,00034,600

Accounts receivable25,20058,900

Payments of expenses to VAT businesses43,000

Payments of expenses to nonVAT businesses35,000

The amounts indicated pertaining to VAT transactions do not include the VAT.

42. The percentage tax due isa. 8,000

b. 9,750c. 11,010d. 9,015

43. The VAT payable isa. 16, 476b. 9,750c. 28,704d. 63,730

44. Which of the following is not considered as a percentage tax?a. of 1% stock transaction on shares traded through the local stock exchange

b. 10% -20% tax on shares not traded through the local stock exchange

c. 10% overseas communication tax

d. 3% tax on keepers of garage

45. Bayanis ticket (daily double) won 42,000, gross of withholding tax and cost of ticket, in a horse race in Vice Ganda Hippodrome. His ticket had cost him 250. How much tax was withheld on winnings in horse races by Bayani?a. 1,680

b. 4,200c. 1,670

d. 4,175

46. Campos sold the following shares of stock thru his stock broker:

Selling PriceMarket Value

Ex Company, not traded123,670114,850

Way Company, traded65,98062,540

See Company, traded143,750156,230

The percentage tax due on the above transaction is a. 1,667

b. 1,048.65c. 1,093.85d. 1,668.10

47. Tiwala had the following transactions of shares of stock:

Selling PriceCost

Sales:

Stick-to-1 Corporation, not traded32,45031,980

Di-Man-Lolo-Co Corporation, traded69,78064,321

Di-Flirt Corporation, traded123,82098,760

Purchases:

Titig Corporation, not traded32,415

Kilig corporation, traded48,657

The total percentage tax on the above transaction isa. 1,130.25b. 724.89c. 968.00d. 815.40

48. Mahal owns shares of stock of domestic corporations which are actively traded in the PSE. Due to the unstable prices in the stock exchange, he decided to sell the shares to the public. The data of which are as follows:

Selling PriceCostGain/Loss

Yabs Corporation230,000220,00010,000

Besi Corporation360,000395,000(35,000)

The stock transaction tax isa. 2,950

b.1,150c. 50

d. Zero

49. Tol Corporation, a closely held corporation decided to open itself to the public. The initial offering of its shares had a selling price of 6,250,000 which is 22.5% of its total outstanding shares after the listing in the local stock exchange. The percentage tax due isa. 31, 250

b. 125,000c. 1,406,250

d. 250,00050. Gross receipts tax is business tax paid by a

a. Hotel operator

b. Insurance Company

c. Franchise Holder

d. Bank

51. Superbank has the following income/loss for the months of March and April:

MarchApril

Interest income maturity of less than 5 years50,000100,000

Rentals50,00050,000

Net trading gain/loss(10,000)20,000

The gross receipts taxes payable for March and April, respectivelya. 5,000;8,500

b. 6,000;9,900c. 6,000;9,200

d. 5,300;9,20052. An offering of shares to the investing public subsequent to an initial public offering

a. Secondary offering

b. Primary offering

c. Follow on/ Follow through offering

d. Follow up offering

53-58

Bosz Corporation, a closely held corporation, has an authorized capital stock of 1,000,000 shares with par value of 1.00/share as of Jan 1, 2008. Of the 1,000,000 authorized shares, 250,000 thereof is subscribed and fully paid up by the following stockholders:

Mars50,000

Beh50,000

Yabidabs50,000

Yeepeeh50,000

Kulasa50,000

Total shares outstanding250,000

Bosz Corporation finally decides to conduct an IPO and initially offers 250,000 of its unissued shares to the investing public. After the IPO in March 2008, Bosz Corporations total issued shares increased from 250,000 to 500,000.At the IPO, one of the existing shareholders, Yabidabs, has likewise decided to sell his entire 50,000 to the public.

53. How many shares have been offered in the primary offering? In the secondary offering?a. 1,000,000; 250,000b. 250,000; 50,000c. 250,000; 550,000d. 250,000; 300,000

54. If the shares were offered at 1.50 per share, how much is the tax due on the primary offering?a. 3,750

b. 6,750c. 15,000

d. 7,500

55. Who is the taxpayer as far as the IPO in the local stock exchange of closely held corporations is concerned?

a. The purchaser of shares of stock offered in the IPO

b. The corporate issuer

c. The corporate purchaser

d. The local stock exchange

56. If the shares of Yabidabs were also offered at 1.50 per share, how much is the total tax on the IPO?a. 3,000 b. 3,750c. 6,750

d. None

57. If in June 2008, Bosz Corporation again decides to increase capitalization by offering another 30,000 of unissued shares to the public at P2/share, such follow on/follow through shall be exempt froma. Percentage tax and documentary stamp tax

b. Documentary stamp tax but not percentage tax

c. Percentage tax but not documentary stamp tax

d. Neither percentage tax nor documentary stamp tax

58. In case Yeepeeh decides to offer his existing 50,000 shares to the public subsequent to IPO at P2/share, the percentage tax shall be

a. 25

b. 500

c. 300

d. 4,000True 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%.

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 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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