2013 (Taxation) Bar Exam Questions: Multiple Choice Question 3

[Discuss/answer the question below. Or see Taxation Instructions; Taxation Essay Questions: 12, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12; Taxation Multiple Choice Questions: 1, 24, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 and 20; See also 2013 Bar Exam: Information, Discussions, Tips, Questions and Results]

III.

Mr. Alas sells shoes in Makati through a retail store. He pays the VAT on his gross sales to the BIR and the municipal license tax based on the same gross sales to the City of Makati. He comes to you for advice because he thinks he is being subjected to double taxation.

What advice will you give him? (1%)

(A) Yes, there is double taxation and it is oppressive.

(B) The City of Makati does not have this power.

(C) Yes, there is double taxation and this is illegal in the Philippines.

(D) Double taxation is allowed where  one tax is imposed by the national government and the other by the local government.

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