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0 tracked cards Commercial and Taxation Laws

In the City of Nueva Esperanza, the sanggunian enacts implementing ordinances on the community tax under Secs. 157–160. Rosa Dizon, a 23-year-old resident of Nueva Esperanza, has never paid community tax. NovaNova Holdings, Inc., a corporation with paid-in capital of PHP 420,000,000, operates in Nueva Esperanza and is subject to corporate community tax under the same ordinance. Which of the following statements correctly describes liability to pay the community tax, the basis for individuals and corporations, and the legal consequences of nonpayment under Secs. 157–160 as implemented by the city ordinance? Choose the best answer.

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Rosa Dizon is liable for personal community tax as a resident of the city who is of legal age; NovaNova Holdings, Inc. is liable for corporate community tax based on its paid-in capital; the exact amount for both is set by the city ordinance; Rosa’s nonpayment will bar her from obtaining a Community Tax Certificate (CTC) and from engaging in local transactions requiring a CTC; NovaNova’s nonpayment would similarly affect its eligibility to obtain or renew a CTC for doing business in the city. Community tax is imposed by the national government and collected by the BIR; Secs. 157–160 are inapplicable to local ordinances; nonpayment has no impact on local transactions since the CTC is purely ceremonial. Rosa Dizon is liable only if she has local employment income in Nueva Esperanza; NovaNova Holdings, Inc. is not liable because corporate community tax is not recognized under Secs. 157–160; a CTC can be issued to Rosa regardless of payment status and nonpayment has no effect on local transactions. Rosa Dizon’s tax liability is determined by her income level, while NovaNova’s corporate tax is determined by the number of employees; both are creditable against municipal income streams; nonpayment does not affect eligibility for a CTC.

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