BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS 64 Chapter 12: EXCISE TAXES CHAPTER 12 EXCISE TAXES Problem 12 – 1 False – excise tax is also imposed on luxurious goods and mineral products False – excise tax imposed to vehicles is based on the value of the vehicles, hence, an example of advalorem tax True False – The primary purpose of excise tax is for regulation and protection True False – P1 per kilo False – 20% of the wholesale price True – It is the same as distilled spirits False – Excise tax is a business tax 10 False – Excise tax is an indirect tax 11 True 12 False – P10 per ton means based on measure, hence, specific excise tax 13 False – subject to excise tax of P0.79 per kilo Problem 12 – True False – Excise tax is also imposed on imported goods False – Excise tax is paid upon transfer or release from the Bureau of Customs True False – net retail price or retail price basically excludes VAT and excise tax False – LPG is a separate and distinct product from processed gas True False – Alcohol products for medicinal purposes are exempt from excise tax False – The excise taxes imposed on imported articles are paid to the Bureau of Customs 10 False – Subject to excise tax upon production or importation 11 True 12 True Problem 12 – D A D D B A B D D 10 D 11 12 13 14 C B C B Problem 12 – C Total sales Divided by net retail price per cigar Number of cigar sold at P600 each Multiplied by excise tax on cigar sold at P600 each [P50 + (15% x 100)] Total excise tax Problem 12 – Not in the choices Total sales excluding VAT (P159,500/1.12) Divided by net retail price per liter P 1,200,000 600 2,000 65 P 130,000 P142,411 14.50 BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS 65 Chapter 12: EXCISE TAXES Number of liters produced Multiplied by applicable excise tax per liter Excise tax Not in the choices Total sales including VAT Add: Excise tax Total amount of sales including VAT and excise tax Problem 12 – Excise tax (P11.65 x 200) A Problem 12 – Tax-exempt D Problem 12 – A 9,821 P 12.30 P120,798 P159,500 120,798 P280,298 P 2,330 Excise tax per proof liter Multiplied by proof liters (200 x 12 x 750/1,000) Excise tax payable Problem 12 – B First P2,100,000 Excess (P1,900,000 x 60%) Excise tax P 11.65 1,800 P20,970 P 512,000 1,140,000 P1,652,000 Problem 12 – 10 A Exempt from excise tax, hence, P Problem 12 – 11 B Local wholesale price Multiplied by percent of excise tax Excise tax Problem 12 – 12 None A Problem 12 – 13 B Excise tax on: Bunker oils (20,000 liters x P0.30) Grease (2,000 x P4.50) Lubricating oil (8,000 x P4.50) Total Less: Creditable excise tax on bunker oils Excise tax Problem 12 – 14 Zero P150,000 20% P 30,000 P 6,000 9,000 36,000 P51,000 6,000 P45,000 A Problem 12 – 15 Excise tax per metric ton of coal P 10 BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS 66 Chapter 12: EXCISE TAXES Multiplied by metric tons of coal produced Excise tax 1,000 P10,000 Problem 12 – 16 Excise taxes: For year 2005 and 2006: (100 x 50 x 10 x P25) P1,250,000 For year 2007 and 2008: (100 x 50 x 10 x P26.06) P1,303,000 For year 2009 and 2010: (100 x 50 x 10 x P27.16) P1,358,000 For year 2011: (100 x 50 x 10 x P28.30) P1,415,000 Problem 12 – 17 Excise tax: (1,000 x 12 x 750 x P11.65) (1,000 x 12 x x P252) P 104,850 3,024,000 P3,128,850 Problem 12 – 18 a (15,000,000/1,000) x P1 b (1,000,000 x P0.79) c (50,000 x P2) d (100,000 x P6.35) e (5,000 x 500 x 10%) Total excise tax P 15,000 790,000 100,000 635,000 250,000 P1,790,000 Problem 12 – 19 First P600,000 Excess (P200,00 x 20%) Excise tax P 12,000 40,000 P 52,000 Problem 12 – 20 Purchase price per car Custom duties Mark-up (P2,100,000 x 30%) Total Add: Excise tax on P2,100,000 Excess (P630,000 x 60%) Total sales price inclusive of excise tax and VAT P1,500,000 600,000 630,000 P2,730,000 P512,000 378,000 890,000 P3,620,000 Problem 12 – 21 Total kilograms of copper (1,000 tons x 25% x 1,000 kg.) Multiply by world price per kilogram Total in US dollars Multiply by exchange rate of peso per dollar Total Multiply by excise tax rate Excise tax 250,000 $0.60 $ 150,000 P50 P 7,500,000 2% P 150,000 BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS 67 Chapter 12: EXCISE TAXES Problem 12 – 22 Quantity (tons of concentrate) Multiplied by kilogram per ton Total kilogram Multiplied by gram per kilogram Total grams Multiplied by percent of metal content Actual grams of metals Multiplied by market price per gram Total in dollars Multiplied by peso rate per dollar Totals in pesos Multiplied by applicable excise tax rate Excise tax Gold 100 1,000 100,000 1,000 100,000,000 0.02% 20,000 $8 $160,000 P60 P9,600,000 2% P192,000 Copper 100 1,000 100,000 1,000 100,000,000 3.00% 3,000,000 $0.01 $30,000 P60 P1,800,000 1% P18,000 Total P210,000 .. .BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS 65 Chapter 12: EXCISE TAXES Number of liters produced Multiplied by applicable excise tax per liter Excise. .. Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS 66 Chapter 12: EXCISE TAXES Multiplied by metric tons of coal produced Excise tax 1,000 P10,000 Problem 12 – 16 Excise taxes: For year 2005 and 2006:... P 150,000 BUSINESS AND TRANSFER TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS 67 Chapter 12: EXCISE TAXES Problem 12 – 22 Quantity (tons of concentrate) Multiplied by kilogram