Jaime is a non-VAT seller of goods. Since he has no official receipts or invoices to support his expenses, he opted for the Optional Standard Deduction (OSD). When he filed his income tax return, he intentionally applied the rate of 20% on his gross sales. In this case, Jaime applied this type of scheme:CapitalizationShiftingEvasionAvoidance1st statement – The Legislative Department levies the taxes.2nd statement – The Executive Department, through the Department of Finance’s line agency, the Bureau of Internal Revenue makes the assessment and collection of internal revenue taxes.Only the 1st statement is trueOnly the 2nd statement is trueBoth statements are trueBoth statements are false

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Answered: Jaime is a non-VAT seller of goods.…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 18DQ

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Jaime is a non-VAT seller of goods. Since he has no official receipts or invoices to support his expenses, he opted for the Optional Standard Deduction (OSD). When he filed his income tax return, he intentionally applied the rate of 20% on his gross sales. In this case, Jaime applied this type of scheme:
1. Capitalization
2. Shifting
3. Evasion
4. Avoidance
1. 1^st statement – The Legislative Department levies the taxes.
2^nd statement – The Executive Department, through the Department of Finance’s line agency, the Bureau of Internal Revenue makes the assessment and collection of internal revenue taxes.
1. Only the 1^st statement is true
  1. Only the 2^nd statement is true
  2. Both statements are true
  3. Both statements are false

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