Local Taxation Quiz PDF

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Taxation under Local Government CodeI. TRUE or FALSE The permit to extract sand, gravel and other quarry resources shall be issued exclusively by the municipal mayor, pursuant to the ordinance of sangguniang panlalawigan. Answer: FALSE Any individual or corporation employing a person subject to prof...

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Taxation under Local Government Code I.

TRUE or FALSE

1. The permit to extract sand, gravel and other quarry resources shall be issued exclusively by the municipal mayor, pursuant to the ordinance of sangguniang panlalawigan. Answer: FALSE 2. Any individual or corporation employing a person subject to professional tax shall require payment by that person of the tax on his profession before employment and annually thereafter. Answer: TRUE 3.

Every corporation no matter how created or organized engaged in or doing business in the Philippines shall pay an annual community tax that should not exceed P10,000.

Answer: FALSE 4.

All copies of taxes, fees and charges imposed must be published for full 2 consecutive days and post at least 3 places within geographical limits.

Answer: FALSE 5. Local Government has the authority to tax the National Government: Answer: TRUE 6. Sanggunian can impose taxes, fees and charges outside its geographical limits. Answer: FALSE 7. To claim tax exemption, every person for whom the property is declared shall file with the provincial, city or municipal assessor within thirty (30) years from the date of the declaration Answer: FALSE

II.

MULTIPLE CHOICE

1. Which of the following is not correct with respect to local business tax? a. It is a property tax. b. It is an annual tax. c. It is a tax on the current year based on the gross sales or receipts of the preceding year. d. It is payable on every separate or distinct establishment where business is conducted. Answer: A. It is an excise tax.

2.

What is the tax base for the imposition by the province of professional taxes? a. b. c. d.

That which Congress determined. The pertinent provision of the local Government Code. The reasonable classification made by the provincial sanggunian. That which the Dept. of Interior and Local Government determined.

Answer: C 3. The real property must be appraised at it’s ________ for the computation of real property tax a. Fair market value b. Zonal Value c. Appraisal Value d. Acquisition cost Answer: A

4.

Who should pay for the real property tax? a. Owner of property b. Buyer of property c. Municipal appraiser d. Provinces, cities and municipalities

Answer: A.

III.

PROBLEM SOLVING

1. Natoy is a production worker at Akoto Company. In taxable year 2018, he had a total gross receipts of P400,000. His community tax for 2019 is_____. Answer: P405 Solution: 400k/1k= 400+5= 405

2-3. Izza’s residential land is located in Cebu Province measuring 1 000 sq.m. with the following additional information: Fair market value in the tax declaration - 12 000/sq.m Zonal value - 8 000/sq.m Assessment level – 20 % The city also imposes additional tax for Special Education Fund. 2. How much is the basic Real Property Tax? 3. How much is the total Real Property Tax due? (Note: Assuming that the maximum allowable tax rates are used.) Answer: 24,000

48,000

Solution: 1 000 x 12 000 = 12 000 000 x 20% = 2 400 000 (assessed value) 2 400 000 x 1% (RPT tax rate) = 24 000 (basic RPT) 2 400 000 x 1% (SEF tax rate) = 24 000 (SEF) 24 000 + 24 000 = 48 000

4. The following data are taken from the books of a well-known manufacturer of liquors in the preceding calendar year: Gross Sales

6,000,000

Sales Return

50,000

Sales Discount

100,000

Cost of Sales

3,000,000

How much is the entity’s local business tax? Answer: 24,375

5. The following data are taken from the books in the preceding calendar year of ABC Store which is a retailer situated in Casili, Consolacion: Gross Sales

300,000

Sales Return

25,000

Deductible Expenses

66,000

How much tax will it be liable to Barangay Casili? Answer: 0 It will be liable to the Municipality Consolacion not to Barangay Casili by 6,000. Computation: Gross Sales x 2% =300,000 x 2% =6,000...