CHAPTER 16

Question 1

A tax on consumption levied on the sale, barter, exchange or lease of goods, properties, and services in the Philippines.

Answer 1

Value-added tax (VAT)

Question 2

The kind of business tax imposed on persons or entities not subject to VAT, usually based on gross sales or receipts.

Answer 2

Percentage tax

Question 3

A business tax imposed on the production, manufacture, sale, or importation of certain goods such as alcohol, tobacco, and petroleum.

Answer 3

Excise tax

Question 4

The person liable to pay VAT in case of importation of goods into the Philippines.

Answer 4

Importer

Question 5

This type of transaction is subject to business tax due to its nature as an onerous transfer.

Answer 5

Sale, barter, or exchange

Question 6

The government agency primarily responsible for collecting internal revenue taxes in the Philippines.

Answer 6

Bureau of Internal Revenue (BIR)

Question 7

A mistaken belief about VAT is that the seller is merely an ___________ of the BIR in collecting the tax from the buyer.

Answer 7

Agent

Question 8

The concept that VAT can be shifted or passed on to the buyer.

Answer 8

Tax shifting

Question 9

Under the Tax Code, engaging in this kind of activity habitually and for profit classifies one as doing business.

Answer 9

Commercial activity

Question 10

This regulation clarifies the VAT liability of importers and sellers in the Philippines.

Answer 10

Revenue Regulations 16-2005

Question 11

T or F:

Business taxes are imposed only on people who are officially registered as businesses.

Answer 11

FALSE

Question 12

T or F:

A person not engaged in business can still be liable for VAT on imported goods.

Answer 12

TRUE

Question 13

T or F:

The seller is legally responsible for paying VAT to the government, but the cost may be passed to the buyer.

Answer 13

TRUE

Question 14

T or F:

Excise taxes apply to all imported goods regardless of type.

Answer 14

FALSE

Question 15

T or F:

Value-added tax and excise tax can both apply to the same transaction, such as importation or manufacture.

Answer 15

TRUE

Question 16

T or F:

Percentage tax is only applicable if the transaction is also subject to VAT.

Answer 16

FALSE

Question 17

T or F:

The BIR allows both VAT and percentage tax to be applied simultaneously to one sale.

Answer 17

FALSE

Question 18

T or F:

VAT is considered a direct tax on the buyer.

Answer 18

FALSE

Question 19

T or F:

The act of repeatedly engaging in commercial transactions indicates a person is engaged in business.

Answer 19

TRUE

Question 20

T or F:

Value-added tax is not applicable on lease of goods and properties.

Answer 20

FALSE