JOYRIE B.

SAKILAN BSBA- III MARKETING

INCOME TAXATION MW 5:30-7:00

Case 1

Daryll refused to pay the basic community tax of P5.00 and the additional tax of
P1.00 for every P 1,000 of his income from business. Can he be imprisoned for non-
payment?

Answer: Daryll will not be imprisoned for non-payment of basic community tax and the
additional tax for every 1000.00 of his income from his business. Community tax is a poll tax
which is not enforceable to pay. While additional tax of his income will only materialize if his
income from his business reached the VAT threshold.

Case 2

The United States Embassy in the Philippines is being required by the Bureau of
Customs to pay customs duties on all properties being transported to the Philippines, for
use in the embassy by the ambassador and other diplomatic officers. May the U.S.
government be required to pay?

Answer: absolutely yes. Since paying custom is not part of the tax exemption
given to foreign embassy and diplomatic missions. Unless if the US government doesn’t
require our own embassy to pay custom duties only then that the US embassy are not
required to pay as a part of the international comity between two countries.

Case 3.

A law is passed requiring owners of lands in Indonesia to pay real property tax in
the Philippines.
Question. Is this law Valid?
Answer: No. a state may only tax persons and properties under its jurisdiction thus
making Indonesian land owners are subject to tax under Indonesian jurisdiction and not
to Philippines.
Case 4.

The Municipality of Buhi enacted an ordinance which imposes occupation tax

upon owners of fishponds. The validity of the ordinance is being challenged on the
ground that it constitutes double taxation because the fishpond owners are subject also
to income tax. Is the ordinance valid?

Answer : the ordinance will be invalidated. Because the fishpond owners are already
subjected to income tax. If the municipality of Buhi will impose occupation tax, it means
they are taxing them twice which is a violation to constitutional provision.
Case 5

A religious group engaged in the sale of bibles and other religious article was required to
pay taxes on the sales of the merchandise. Is it imposition of the tax valid?

Answer : No. Religious groups are tax exempt.

Case 6

Francia contends that his tax delinquency of P2,400 has been extinguished by legal
compensation. She claims that the government owes her P4,116 when a portion of his
land was expropriated on October 19. Hence, her obligation had been set-off by
operation of law. Is the reasoning of Francia justified?

Answer: No. the government does not owe her since expropriation of property is part of the
power of the state. She was even given a just compensation on the said land.

Case 7
Mr. Angdaya who wishes to avoid the payment of taxes assessable on the
transaction was advised by his tax consultant to make it appear that his gross income in
2011 was only P100,000 instead of the correct amount P150,000. Is this tax evasion
of tax avoidance?

Answer: It is definitely a tax evasion. What Mr. Angdaya does is under the declaration of sales
which is an illegal process of not complying with applicable provision of the law.