June Maylyn D.

Marzo
BSAIS-3rd year

BAINCTAX

Case Study Homework

Module 1

Case Study 1.2 WHO IS TO BLAME?

Many consider that it was untimely that the internal revenue office of Wakanda issued a
memorandum circular during the pandemic reminding guidelines on the registration of online
businesses for tax filing. As enacted under Wakanda’s revenue code, online businesses are liable to
income tax on the gains from their sales. One of Wakanda’s officials, Senator Jack A. Moon,
questioned the internal revenue office on its issuance indicating that it was not moral for it to run
after online businesses and impose taxes on their income, more so that they are normally
conducting such endeavors for mere subsistence. Is the senator’s contention tenable?

Answer:

Yes, the reason of the Senator Jack A. Moon will probably valid and acceptable because this current
situation was obviously not fine. The Internal Revenue Office of Wakanda should not issue a
memorandum to remind the online businesses for tax filing, especially if the business is small
enterprise and it only had profit of minimum or sometimes there are no sales for that day.

It should have more consideration for the small businesses or enterprises to exempt from the tax if
the profit will range around 250,000 a year. In this time of pandemic, many of the companies closed
or shut down their operations so probably the employees, staffs or even the on the job training are
also affected.

There should no one to blame because taxation is an inherent power of the State. It is involuntary or
compulsory to us to contribute for the government. The tax will imposed only to rich, workers who
had their high salary, big businesses or companies etc. but for the online businesses that had no high
profit and sales it should have consideration.

Case Study 1.3 IS IT EXEMPTED?

A congregation owns a parcel of land. Most of it is directly used for its religious and educational
endeavors. A small commercial space was built beside the school it operates to rent out to
businesses which would cater the needs of its students. The proceeds from rentals are being used
for charitable purposes. Should the rental income and property be subjected to tax?

Answer:

No, the rental income should not be subjected to tax because the purpose of rental are to support
and help the charity aside of catering the needs and wants of its students. It gives benefits and
advantages for everyone in their society.

Church and public schools are one of the examples exempted to tax. Based from the law they are
only exempted if it is according to religious and public services. When it talks about the property, it
should still imposed tax from the owner of that parcel land.
June Maylyn D. Marzo
BSAIS-3rd year

The scope of the taxation said all persons, property, rights and privileges are involuntary and
compulsory to contribute tax from the gain of income or profit.

Module 2

Case 2.1 GOING LOCO on Local

The Municipality of Santo Cristo, claiming that it can impose taxes under the Local Government
Code, imposed a tax on common carriers in addition to the 3% common carrier’s tax imposed in the
National Internal Revenue Code. The common carriers in the municipality objected on this ordinance
stating that the power of taxation cannot be delegated and that this constitutes double taxation. Is
their contention tenable?

Answer:

The municipality of Santo Cristo has to assess first before giving additional tax to the common
carriers because it was not by the existing law of the National Internal Revenue Code.

As the country now is in a pandemic situation, and the economy is not in a stable status, the majority
is having difficulty with their finances, finding jobs, and many factors. Hence, it is not the right time
to do so. What will happen to the earnings of the common carriers if they will still be a tax of
additional?

And yeah, the power of taxation can be delegated. It's a sensitive issue that has to be discussed
thoroughly with the highest officials of the land and the Bureau of Internal Revenue.

Case 2.2 IS THE COMPROMISE COMPROMISED?

Due to the government budget crunch due to the pandemic, the economic manager of the country
looked into tax compromises and abatements done during the year. Upon evaluation, it discovered a
tax liability of P400, 000 which was compromised by the Regional Evaluation Board. The economic
manager stated that the tax compromise is not valid since it is the CIR’s power for the tax
compromise to take effect. He also adds that this power cannot be delegated. Is his contention
tenable?

Answer:

The CIR has the power to take effect of different rules for tax implementation. It can say no to the
proposals or regulations that are being recommended. The Regional Evaluation Board's
compromised PhP400, 000.00 is tenable because it will still be subject to audit findings if this is the
amount to be held as a liability.

With the pandemic around. It is not the right time to declare such liabilities given that our nation,
and also globally faces a crisis.

The taxation will be impose if it is related to scope and supposed to contribute in government to
settle their tax as the funds of the government for the public services.
June Maylyn D. Marzo
BSAIS-3rd year