Professional Documents
Culture Documents
Ka Tato owns a parcel of land in San Jose, Batangas declared for real property
taxation, as agricultural. In 1990, he used the land for a poultry feed processing plant
but continued to declare the property as agricultural. In March 2011, the local tax
assessor discovered Ka Tatos change of use of his land and informed the local
treasurer who demanded payment of deficiency real property taxes from 1990 to 2011.
Has the action prescribed?
No, the deficiency taxes for the period 1990 up to 2011 may still be collected within
10 years from March 2011
No, the deficiency taxes may be collected within five years from when they fell due
Yes, more than 10 years had lapsed for the period 1990 up to 2000, hence the right
to collect the deficiency taxes has prescribed
Yes, more than 5 years had lapsed for the collection of the deficiency taxes for the
period 1990 up to 2005
SOLUTION:
Over But not over The tax shall be plus Of excess over
1,000,000 3,000,000 44,000 8% 1,000,000
3,000,000 5,000,000 204,000 10% 3,000,000
Hotel Zalora, VAT-registered, offers different services to its guest. The following data
taken from the books of the taxpayer are for the first month of the first quarter of 2014:
Revenues Collections
Hotel rooms (local guest) 800,000 700,000
Dining hall:
Sale of food and refreshments 1,000,000 850,000
Sale of wine, beer and liquor 700,000 600,000
Videoke bar:
Sale of food and refreshments 600,000 550,000
Sale of wine, beer and liquor 500,000 450,000
The Commissioner of Internal Revenue may abate or cancel the tax liability when
SOLUTION:
On vanishing deduction, the therapy on which the deduction is being claimed must have
been received within five years prior to death; On judicial expenses, only those incurred
before the last day for filing of the return will be allowed as a deduction. Medical
expenses are allowable as deduction only if incurred within one year prior to death.
4.2 Taxation - Income Tax on Capital Assets, Sales or Exchange of Properties (Difficult)
Question 15
The Constitution does not prohibit indirect taxes. What the Constitution provides is that
Congress shall evolve a progressive system of taxation. Resort to indirect taxes should
be minimized but not avoided because it is difficult, if not impossible, to avoid them
regressive taxes do not violate Sec 28 (1), Art VI of the Constitution
indirect taxes should be shifted without violating public purpose
regressive taxes is in accordance with theoretical justice or ability to pay
indirect taxes do not violate due process
October:
November:
December:
Investments 4,000,000
Vehicle 6,000,000
Family home (assessed value, P10,000,000; zonal value,
7,000,000)
Piece of land (cost, P12,000,000; fair market value,
P15,000,000)
Actual funeral expenses 350,000
Medical expenses (including P300,000 unpaid bill) 700,000