2017 (Taxation) Bar Exam Questions: Question 9

[Answer/discuss the question below, or see 2017 bar exam Taxation Instructions; 2016 Taxation Questions: 12345678101112131415161718, and 19; See also 2017 Bar Exam: Information, Discussions, Tips, Questions and Results]

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Upon his retirement, Alfredo transferred his savings derived from his salary as a marketing assistant to a time deposit with AAB Bank. The bank regularly deducted 20% final withholding tax on the interest income from the time deposit.

Alfredo contends that the 20% final tax on the interest income constituted double taxation because his salary had been already subjected to withholding tax.

Is Alfredo’s contention correct? Explain your answer. (3%)

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