Home›Bar Review›2014›Taxation›Question XXVII
Question XXVII
XXVII. In January 2013, your friend got his first job as an o ffice clerk. He is single and lives with his family who depends upon him for financial support. His parents have long retired from their work, and his two (2) siblings are still minors and studying in grade school. In February 2014, he consulted you as he wanted to comply with all the rules pertaining to the preparation and filing of his income tax return. He now asks you the following:
(a)(A) Is he entitled to personal exemptions? If so, how much? (1%)
(b)(B) Is he entitled to additional exemptions? If so, how much? (1%)
(c)(C) What is the effect of the taxes withheld from his salaries on his taxable income? (2%)
XXVIII.
Choose the correct answer. Tax laws - (1%)
(A) may be enacted for the promotion of private enterprise or business for as long as it gives incidental advantage to the public or the State
(B) are inherently legislative; therefore, may not be delegated
(C) are territorial in nature; hence, they do not recognize the generally-accepted tenets of international law
(d)(D) adhere to uniformity and equality when all taxable articles or kinds of property of the same class are taxable at the same rate
XXIX.
Doña Evelina, a rich widow engaged in the business of currency exchange, was assessed a considerable amount of local business taxes by the City Government of Bagnet by virtue of Tax Ordinance No. 24. Despite her objections thereto, Doña Evelina paid the taxes. Nevertheless, unsatisfied with said Tax Ordinance, Doña Evelina, through her counsel Atty. ELP, filed a written claim for recovery of said local business taxes and contested the assessment. Her claim was denied, and so Atty. ELP elevated her case to the Regional Trial Court (RTC).
The RTC declared Tax Ordinance No. 24 null and void and without legal effect for having been enacted in violation of the public ation requirement of tax ordinances and revenue measures under the Local Government Code (LGC) and on the ground of double taxation. On appeal, the Court of Tax Appeals (CTA) affirmed the decision of the RTC. No motion for reconsideration was filed and the decision became final and executory. (4%)
(A) If you are Atty. ELP, what advice will you give Doña Evelina so that she can recover the subject local business taxes?
(B) If Doña Evelina eventually recovers the local business taxes, must the same be considered as income taxable by the national government?
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