XI. Koko's primary source of income is his employment with the government. He earns extra from the land he inherited from his parents, and which land he has been leasing to a private, non-stock, non-profit school since 2005. Last January, the school offered to buy the land from Koko for an amount equivalent to its zonal value plus 15% of such zonal value. Koko agreed but required the school to pay, in addition to the purchase price, the 12% VAT. The school refused Koko's proposal to pass on the VAT contending that it was an entity exempt from such tax. Moreover, it said that Koko was not regularly engaged in the real estate business and, therefore, was not subject to VAT. Consequently, Koko should not charge any VAT to the school.