Other Percentage Tax

Page 1 of 7 Other Percentage Tax Exercises 1. A tax on business is a. Direct tax b. Indirect tax c. Property tax d.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. Contractor’s 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 only b. 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. Restaurant 1,350,000 II. Barbershop 625,000 III Seller of 1,875,000 . Agricultural food products Which combination will subject Maurot to VAT? a. I only b. I and II c. I, II and III d. 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 123,4 31, 2007 50 Gross sales 67,80 0 Purchases from VAT registered 156,9 suppliers 80 The percentage tax due is a. 34,823 b. 6,780

c. 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 is a. 12,000 b. 1,900 c. 825 d. 2,500 8. Assuming that rustico is a VAT registered taxpayer and the amounts indicated are exclusive of VAT, the VAT due is a. 12,000 b. 1,900 c. 2,580 d. 2,500 9. One of the following is subject to common carrier’s 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 carrier’s 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 companies 11.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 22,0 Truck 7,25 No. 1 00 No. 1 0 Jeepney 23,3 Truck 8,50 No. 2 00 No. 2 0 Pedicab 800 Truck 14,0 No. 1 No. 3 00 Pedicab 1,00 No. 2 0 The percentage tax due on Gadil is a. 831 b.795 c. 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 isa. Subject to income tax but exempt from percentage tax b. Subject to value-added tax if the gross annual receipts exceed 1,500,000.

Page 2 of 7 c. A marginal income earner and therefore, exempt from common carrier’s tax and VAT d. Subject to common carrier’s 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 passengers 485,0 00 From transport cargo 220,0 00 From rental of its cargo-trucks 33,00 to individual lessees 0 From rental of its “rent-a-car” 30,00 tp balikbayans (with chauffer 0 Payments to VAT registered persons during the month amount to 99,000. 13.The percentage tax due is a. 22,740 b.21,150 c. 7,590 d. 15,450 14.Assuming that the amounts given do not include the tax, the VAT due isa. 23,000 b.18,480 c. 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 buses 280,0 00 From the gas station (in 300,0 loading its own buses) 00 From the garage 12,00 0 How much is the common carrier’s tax payable? a. 17,760 b. 8,400 c. 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, 100,0 8,000) 00 Bus 2 (carriageof goods, 65,00 3,500) 0 Salaries of drivers and 25,00 conductors 0 Cost of oil and engine 160,0 00 Taxi 30,00

0 22,00 0 45,00 0 250,0 00

Jeepney Cargo Truck Sea Vessel

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. 6,165 c. 14,430 d. 5,730 17.The output tax on Luigi Lines is a. 37,380 b. 31,150 c. 33,375 d. 36,780 18-19 Love Bus Company operates 10 units of buses. During the month, it had the following data in its books: Receipts from passengers 2,000,0 00 Receipts from cargoes 500,00 0 Receivable from transport of 15,000 passengers Receivable from transport of 5,000 cargoes Payments for repair of 30,000 transport units Salaries of personnel 300,00 0 Purchase of spare parts 60,000 Registration with LTO 10,000 Premiums on insurance 15,000 18.How much is the percentage tax payable a. 60,000 b. 60,450 c. 39,000 d. None 19.How much is the VAT payable a. 39,600 b. 43,800 c. 39,000 d. 57,480 20.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?

a . b . c .

Common Carrier 1 0%

Common Carrier 2 3%

3%

3%

0%

0%

Page 3 of 7 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 is a. 30,000 b. 9,900 c. 50,000 d. 10,000 23.How much s the VAT payable if it is registered under the VAT system? a. 10,000 b. 9,900 c. 11,357 d. 15,600 24-25 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 is a. 51,000 b. 5,000 c. 16,500 d. 56,500 25.The VAT payable for the month is a. 33,600 b. 5,000 c. 16,500 d. 7,200 26.One of the following is subject to percentage tax a. 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 770,0

bills Domestic calls Overseas calls (outgoing)

00 501,6 00 533,5 00

The percentage tax to be remitted by BATELCO during the quarter is a. 73,600 b. 48,500 c. 53,350 d. 80,960 28-30 Makasalanan Corporation had the following data during the month of February: Net income during the month 40,00 0 Collections during the month From services rendered in 50,00 Jan 0 From services rendered in 300,0 Feb 00 From services to be 10,00 performed in march 0 (advances) 28.The business tax payable if Makasalanan is a bus company: a. 12,000 b. 22,800 c. 10,800 d. 21,000 29.The business tax payable if Makasalanan is a cabaret: a. 64,000 b. 64,800 c. 72,000 d.136,800 30.The business tax payable if Makasalanan is a race track: a. 120,000 b. 228,000 c. 210,000 d. 108,000 31.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 gates 390,0 00 Receipts from advertisements 15,00 inside the cockpit arena 0 Gross receipts from restaurant: Sale of food and softdrinks 21,00 0 Sale of liquor 33,00 0 Disbursements (subject to 24,20 VAT) 0 Disbursements (not subject 12,00 to VAT) 0 32.The amusement tax due is

Page 4 of 7 a. 82,620 b. 81,828 c. 72,900 d. 19,980 33.Suppose the restaurant is owned and operated by Mon, a non VAT registered person, the business tax payable by Mon is a. 1,260 b. 534 c. 4,909.09 d. 1,620 34.Suppose the restaurant is operated by Mon, the percentage tax due on Rose is a. 3,300 b. 12,150 c. 92,700 d.72,900 35.Assume that Mon, a VAT registered taxpayer is operating the restaurant. The business tax payable by Mon is a. 81,600 b. 3,576 c. 4,909.09 d. 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 is a. 19,005 b. 22,806 c. 28,638 d. 5,832 37-38 Sogo Hotel offers the following services to its guests and from which revenues were derived for the month, as follows: Revenu Collectio es ns Hotel rooms 1,250,0 984,000 00 Dining Hall: Sale of foods 940,00 860,000 and refreshments 0 Sale of wine, 780,00 620,000 beer and liquors 0 Disco: Admission fee 25,000 15,000 Sale of foods 250,00 115,000 and drinks 0 Sale of wines , 650,00 540,000 beer and liquor 0 37.The amusement tax due is a. 110,700 b. 120,600 c. 552,240 d. 386,640 38.If Sogo Hotel is subject to VAT, the output tax thereon is (assume that the amounts are tax inclusive) a. 295,680 b. 264,000 c. 218,000 d. 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 Balyeno Professional basketball Amateur basketball Billiard

85,00 0 120,0 00 36,70 0 45,00 0

The percentage tax payable by Boy Cali on the Coliseum is a. 18,000 b. 23,505 c. 43,005 d. 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 is a. 135,000 b. 96,000 c. 43,005 d. 160,005 41.Paiyakan Insurance Company, a domestic corporation, had the following collections from insurance premiums during the month: Health and accidental 2,340,0 insurance 00 Motor Vehicle insurance 1,250,0 00 Life and disability 1,850,0 insurance 00 Property insurance 2,840,0 00 The percentage tax due is a. 92,500 b. 414,000 c. 272,000 d. 209,500 42-43 Madulag Insurance Company had the following data on collections of premiums and disbursements during the month: Life Non life insuranc insurance e Cash collections 150,000 145,700 Checks 45,000 34,600 Accounts 25,200 58,900 receivable Payments of expenses to VAT businesses Payments of expenses to nonVAT businesses

43,000 35,000

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

Page 5 of 7 42.The percentage tax due is a. 8,000 b. 9,750 c. 11,010 d. 9,015 43.The VAT payable is a. 16, 476 b. 9,750 c. 28,704 d. 63,730 44.Which of the following is not considered as a percentage tax? a. ½ 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.Bayani’s 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. 4,200 c. 1,670 d. 4,175 46.Campos sold the following shares of stock thru his stock broker: Selling Market Price Value Ex Company, 123,670 114,850 not traded Way Company, 65,980 62,540 traded See Company, 143,750 156,230 traded The percentage tax due on the above transaction is a. 1,667 b. 1,048.65 c. 1,093.85 d. 1,668.10 47.Tiwala had the following transactions of shares of stock:

Sales: Stick-to-1 Corporation, not traded Di-Man-Lolo-Co Corporation, traded Di-Flirt Corporation, traded Purchases: Titig Corporation, not traded Kilig corporation, traded

Selling Price

Cost

32,450

31,9 80

69,780

64,3 21 98,7 60

123,820

32,4 15 48,6 57

The total percentage tax on the above transaction is a. 1,130.25 b. 724.89 c. 968.00 d. 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 Cost Gain/Lo Price ss Yabs 230,00 220,0 10,000 Corporatio 0 00 n Besi 360,00 395,0 (35,000 Corporatio 0 00 ) n The stock transaction tax is a. 2,950 b.1,150 c. 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 is a. 31, 250 b. 125,000 c. 1,406,250 d. 250,000 50.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: Interest income maturity of less than 5 years Rentals Net trading gain/loss

March 50,00 0

April 100,0 00

50,00 0 (10,00 0)

50,00 0 20,00 0

The gross receipts taxes payable for March and April, respectively a. 5,000;8,500 b. 6,000;9,900 c. 6,000;9,200 d. 5,300;9,200 52.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: Mars 50,00

Page 6 of 7

Beh Yabidabs Yeepeeh Kulasa Total shares outstanding

0 50,00 0 50,00 0 50,00 0 50,00 0 250,0 00

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 Corporation’s 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; 250,000 b. 250,000; 50,000 c. 250,000; 550,000 d. 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. 6,750

c. 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. 3,750 c. 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 from a. 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. 4,000

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%. 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.

Page 7 of 7 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.

1. true 2.f 3. true 4. true 5.f 6.f 7.f 8. true 9. true 10.f 11.f 12.f 13.f

14.f 15.f 16. true 17. true 18. true 19. true 20. true 21. true 22.f 23. true 24.f 25.f