1. Prepared by: Lilybeth A. Ganer Revenue Officer
INCOME TAX
COMPUTATION FOR
CORPORATE TAXPAYERS
Prepared by: Lilybeth A. Ganer Revenue Officer

2. What is a corporation?
Corporation – is an artificial being created by law, having the rights of succession and the powers, attributes and properties authorized by law or incident to its existence.
For taxation purposes, corporation shall include –
Partnerships
Joint-stock companies
Joint accounts
Associations
Insurance companies

3. A corporation does not include –
General Professional Partnership
Joint venture or consortium formed for the purpose of
undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the government

4. Classification of Corporation
1.) Domestic corporation
- is one created or organized in the
Philippines or under its laws. (Sec (C),NIRC)
2.) Foreign corporation
- Those that were formed, organized orexisting under any law other than
those of the Phils. irrespective of
the nationality of its stockholders.

5. Foreign corporations are either – A. Resident foreign
- Foreign corporation engaged in trade or business within the Phil. Generally, it establishes branch or an office for the purpose of doing business or trade.

6. B. Non-resident foreign
- Foreign corporation not engaged in trade or business within the Phil.

7. Normal Corporate Income Tax (NCIT) Minimum Corporate Income Tax (MCIT)
Corporations may be subjected to the following taxes:
Normal Corporate Income Tax (NCIT)
Minimum Corporate Income Tax (MCIT)
Gross Income Tax (GIT)
Capital Gains Tax on sale of real property or on sale of shares of stock (CGT)
Final Tax on Passive income (FT)

8. Evolution of Corporate Income Tax Rate
Effectivity
Basis
34%
33%
32%
35%
30%
Jan 1, 1998
Jan 1, 1999
Jan 1, 2000
Nov 1, 2005
Jan 1, 2009
RA 8424
RA 9337

9. Taxability of Corporations (RA 9337)
Income In General
Domestic
Resident Foreign
Non-Res. Foreign
All income derived from sources within or outside the Phils.
30%
(Net Taxable Income) --
All income derived from sources within the Phils.
(Gross Income)
Optional Corporate Tax Rate
15%
---
Minimum Corporate Income Tax
(MCIT) 2%

10. The Normal Corporate Income Tax BIR Form 1702 (General Format for Income tax computation on business income)
Sales/ Revenues/ Fees from within and without
P xxx
Less: Sales returns, allow., and disc. (if any)
P xxx
Cost of Sales
xxx
Gross Income from operation
Add: Non-operating and other income not
subjected to final tax or capital gains tax
Gross Income
Less: Allowable itemized business deductions
Net Taxable Income
Multiply by Normal Corporate Income Tax Rate
30%
Normal Corporate Income Tax
===

11. Sample Problem:
Mara Clara Inc. is a domestic corporation engaged in the retail of various household merchandise. For TY 2010, the company had the following account balances:

12. Cost of Sales P 400,000. 00 Sales Returns allowance and disc. 50,000
Cost of Sales P 400, Sales Returns allowance and disc. 50, Administrative Expense 230, Depreciation Expense 20, Rental Expense 100, Light and Water Expense 50, Rental Income 100, Sales 1,050, Compute for the Normal Income Tax Due:

13. Solution: Sales/ Revenues Less: Sales Rets., Allow. & Disc.
P1,050,000.00
Less: Sales Rets., Allow. & Disc.
50,000.00
Cost of Sales
400,000.00
450,000.00
Gross Income from operation
600,000.00
Add: Non-operating and other
income not subjected to Final
tax or capital gains tax
100,000.00
Gross Income
700,000.00
Less: Itemized business deductions
Net Taxable Income
300,000.00
X Normal Corp. Income Tax Rate
30%
Normal Corporate Income Tax
P90, =======

14. How much is the Normal Corporate Income Tax if Mara Clara, Inc. is: 1
How much is the Normal Corporate Income Tax if Mara Clara, Inc. is: 1. A Resident Foreign Corporation? 2. A Non-Resident Foreign Corporation? Answer: 1. ___________________ 2. ____________________

15. Minimum Corporate Income Tax
(MCIT)
(RR No as amended by
RR No )

16. Sec. 27(E) and 28 (A)(2) of the NIRC:
Imposed on:
Domestic & Res. Foreign
2 % on Gross Inc.
if: - in the 4th year of operation
- net loss/zero taxable inc./
MCIT is greater than NCIT

17. For sale of goods :
Gross sales ,000,000.00
Less: Sales Ret., Disc & Allow ,000.00
Cost of Goods Sold ,000.00
Gross Income from operation ,000.00
Add: Other Income not subject to
Final Tax or Capital Gains Tax ,000.00
Total Gross Income subject to MCIT ,000.00
========

18. Gross income
include all items of gross income enumerated under Section 32(A) of the Tax Code, as amended, except income exempt from income tax and income subject to final withholding tax.
“Gross sales”
shall include only sales contributory to
income taxable under Sec. 27(A) of the Code.
“Cost of goods sold”
shall include all business expenses directly
incurred to produce the merchandise to bring
them to their present location and use

19. For sale of services
Gross Revenue P 5,000,000.00
Less: Cost of services ,000.00
Gross Income ,050,000.00
Add: Other Income not subject
to Final Tax or Cap.Gains Tax ___ --____
Total Gross Income ,050,000.00
=========

20. “Gross Revenue”
shall include income from sale of services,
likewise, taxable under Sec. 27(A).
“Cost of Services or Direct Cost of Services”
shall include business expenses directly
incurred or related to the gross revenue from
rendition of services.

21. Determine the appropriate income tax of Bungga-Bungga Corporation.
Illustration:
Bungga-Bungga Corporation has been operating since January 1, Data pertinent to its operations covering 2008 to are as follows:
Determine the appropriate income tax of Bungga-Bungga Corporation.
2008
2009
2010
Gross Sales
3,080,000
4,100,000
5,200,000
Sales Ret., Disc. & Allow.
80,000
100,000
200,000
Cost of Sales
1,500,000
2,000,000
2,500,000
Operating Expenses
1,450,000
1,900,000
2,100,000

22. 1. Computation of Normal Corporate Income Tax(NCIT):
2008
2009
2010
Gross Sales
3,080,000
4,100,000
5,200,000
Sales Ret., Disc. & Allow.
80,000
100,000
200,000
Net Sales
3,000,000
4,000,000
5,000,000
Cost of Sales
1,500,000
2,000,000
2,500,000
Gross Income
Operating Expenses
1,450,000
1,900,000
2,100,000
Net Taxable Income
50,000
400,000
X Normal Corp. Tax rate
35%
30%
Normal Corp. Income Tax
17,500
30,000
120,000

23. 2. Computation of Minimum Corporate Income Tax (MCIT)
Note: The MCIT for TY 2008 is not applicable because the company has not yet reached its fourth year
2009
2010
Gross Income
2,000,000
2,500,000
X MCIT rate 2%
MCIT
40,000
50,000

24. 3. Determination of Income tax due and payable:
2008
2009
2010
NCIT
17,500
30,000
120,000
MCIT
Not Applicable
40,000
50,000
2008
2009
2010
NCIT or MCIT, w/ever is higher
17,500
40,000
120,000
Less: Excess of MCIT over NCIT
10,000
Income Tax Due and Payable
110,000

25. Carry forward of Excess MCIT
Excess of MCIT over normal income tax shall be carried forward on an annual basis and credited against the normal income tax for the 3 immediately succeeding taxable years
Excess MCIT can only be credited against the income tax due if the normal income tax is higher than the MCIT

26. Carry forward of Excess MCIT
Excess MCIT which has not or cannot be so credited against the normal income tax due for the 3-year period shall lose its credibility
Excess MCIT cannot be claimed as a credit against the MCIT itself or against any other losses

27. Carry forward of Excess MCIT (cont.)
The final comparison between the normal income tax payable and the MCIT shall be made at the end of the taxable year
The payable or excess payment in the Annual Income Tax Return shall be computed taking into consideration income tax payment made at the time of filing of quarterly income tax returns whether this be MCIT or normal income tax

28. Normal Income Tax (NIT)
Rules on crediting of tax payments & taxes withheld
Annual Computation
Normal Income Tax (NIT)
is higher than MCIT
MCIT
is higher than Normal Income Tax
Excess MCIT from prior year can be deducted from the NIT due
Excess withholding tax from prior year can be deducted from the NIT due
Excess MCIT from prior years cannot be deducted from the MCIT due
Excess withholding tax from prior year can be deducted from the MCIT due

29. Normal Income Tax (NIT)
Rules on crediting of tax payments & taxes withheld
Annual Computation
Normal Income Tax (NIT)
is higher than MCIT
MCIT
is higher than Normal Income Tax
Quarterly taxes withheld can be credited from the NIT due
Quarterly income tax payments whether Normal Income Tax or MCIT can be deducted from the NIT due
Quarterly taxes withheld can be credited from the MCIT due
Quarterly income tax payments whether MCIT or Normal Income Tax can be deducted from the MCIT due
Note: The final comparison between the NIT and MCIT shall be made at
the end of the taxable year

30. Normal Income Tax (NIT)
Rules on crediting of tax payments & taxes withheld (cont.)
Quarterly computation
Normal Income Tax (NIT)
is higher than MCIT
MCIT
is higher than Normal Income Tax
Excess MCIT from prior year can be deducted from the quarterly NIT due
Excess withholding tax from prior year can be deducted from the quarterly NIT due
Excess MCIT from prior year cannot be deducted from the quarterly MCIT due
Excess withholding tax from prior year can be deducted from the quarterly MCIT due

31. Normal Income Tax (NIT)
Rules on crediting of tax payments & taxes withheld (cont.)
Quarterly computation
Normal Income Tax (NIT)
is higher than MCIT
MCIT
is higher than Normal Income Tax
Quarterly taxes withheld can be credited from the quarterly NIT due
Payment from previous quarters of the taxable year can be deducted from the cumulative tax due (whether NIT or MCIT)
Quarterly taxes withheld can be credited from the quarterly MCIT due
Note: Quarterly comparison to determine whichever is higher between the NIT and MCIT
shall be done on a cumulative basis

32. Illustration 1 - Normal income tax at year end is higher
than MCIT
Panday Corporation’s computed normal income tax and MCIT, and creditable income taxes withheld from 1st to 4th quarters including excess MCIT and excess withholding taxes from prior year/s are as follows:
Excess Excess
Normal Taxes MCIT W/tax
Qtr. Inc. Tax MCIT Withheld Prior Years Prior Years
1st , , , , ,000
2nd , , ,000
3rd , , ,000
4th 200, , ,000

33. Computation
1st Quarter
Quarterly corporate income tax due
(higher amount between normal income tax
and MCIT) – normal income tax P100,000
Less : Taxes Withheld – Prior Year ,000
Taxes Withheld – 1st qtr ,000
Excess MCIT prior year , ,000
Net Income Tax Due , 1st quarter
– normal income tax P 40, =======

34. 2nd Quarter Computation (cont.) Excess Excess Normal Taxes MCIT W/tax
Qtr Inc. Tax MCIT Withheld Prior Years Prior Years
1st , , , , ,000
2nd , , ,000
Total , , ,000
====== ====== =====

35. Computation (cont.)
Quarterly corporate income tax due
(higher amount between normal
income tax and MCIT) – MCIT P330,000
Less : Taxes Withheld – Prior Year ,000
Taxes Withheld – 1st qtr ,000
Taxes Withheld – 2nd qtr ,000
Net income tax payment – 1st qtr 40, ,000
Net Income Tax Due , 2nd quarter – MCIT P230,000
=======

36. Computation (cont.)
3rd Quarter
Excess Excess
Normal Taxes MCIT W/tax
Qtr Inc. Tax MCIT Withheld Prior Years Prior Years
1st 100, , , , ,000
2nd , , ,000
3rd 250, , ,000
Total , , ,000
====== ====== ======

37. Computation (cont.)
Quarterly corporate income tax due
(higher amount between normal income tax
and MCIT) – Normal Income Tax P470,000
Less : Taxes Withheld – Prior Year ,000
Taxes Withheld – 1st qtr ,000
Taxes Withheld – 2nd qtr ,000
Taxes Withheld – 3rd qtr ,000
Net income tax payment – 1st qtr ,000
MCIT paid in the 2nd quarter ,000
Excess MCIT in prior year , ,000
Net Income Tax Due , 3rd quarter
– Normal Income Tax P 70, =======

38. Annual Income Tax (NIT)
Computation (cont.)
Annual Income Tax (NIT)
Excess Excess
Normal Taxes MCIT W/tax
Qtr Inc.Tax MCIT W/held Prior Years Prior Years
1st , , ,000 P30, ,000
2nd , , ,000
3rd , , ,000
4th , , , Total , , ,000
====== ====== ======

39. Computation (cont.)
Annual corporate income tax due
(higher amount between normal income tax
and MCIT) – Normal Income Tax P670,000
Less : Taxes Withheld – Prior Year ,000
Taxes Withheld – 1st qtr ,000
Taxes Withheld – 2nd qtr ,000
Taxes Withheld – 3rd qtr ,000
Taxes Withheld – 4th qtr ,000
Net income tax payment – 1st qtr ,000
Net income tax payment – 3rd qtr ,000
MCIT paid in the 2nd quarter ,000
Excess MCIT in prior year , ,000
Annual Net Income Tax Due – NCIT P 165,000
=======

40. Illustration 2 - MCIT at year end is higher than the normal income tax
Excess Excess
Normal Taxes MCIT W/tax
Qtr. Inc. Tax MCIT Withheld Prior Years Prior Years
1st 100, , , , ,000
2nd , , ,000
3rd 250, , ,000
4th , , ,000
Total , , ,000
====== ====== ======

41. Annual Income Tax (MCIT)
Computation
Annual Income Tax (MCIT)
Annual corporate income tax due
(higher amount between normal
income tax and MCIT) – MCIT P550,000
Less : Taxes Withheld – Prior Year ,000
Taxes Withheld – 1st qtr ,000
Taxes Withheld – 2nd qtr ,000
Taxes Withheld – 3rd qtr ,000
Taxes Withheld – 4th qtr ,000
Net income tax payment – 1st qtr ,000
Net income tax payment – 3rd qtr ,000
MCIT paid in the 2nd quarter , ,000
Annual Net Income Tax Due – MCIT P 75,000
=======

42. Illustration 3: - Carry forward of excess MCIT
Any excess of the MCIT over the normal income tax as computed under Sec. 27(A) shall be carried forward on an annual basis and credited against the normal income tax for the three (3) immediately succeeding years.
The excess MCIT cannot be claimed as a credit against the MCIT itself or against any other losses.

43. Illustration:
YEAR NORMAL IT MCIT EXCESS , , , , , , , , , , , , , , , , , , ,000.00

44. NCIT or MCIT 125T 8T 5T 100T Less: Excess of MCIT 125T 8T 5T -_ Income tax T ==== === === ====

45. Accounting Entries For 2011 Provision for Income tax P250,000
Income Tax Payable P250,000
To record Income Tax
liability - normal rate.
Deferred Charges – MCIT P150,000
Income tax payable P150,000
To record excess MCIT

46. Accounting Entries For year 2012 Income Tax Payable P250,000
Cash in Bank P250,000
To record payment of income tax due for 2011.
For year 2012
Provision for Income Tax P125,000
Income Tax Payable P125,000
To record IT liability using the normal rate.

47. Accounting Entries
Income Tax Payable P125,000 Deferred Charges-MCIT P125,000 To record application of excess MCIT against normal IT for year For 2013 Provision for Income Tax P8,000 Income Tax Payable P8,000 To record IT liability using the normal rate.

48. Accounting Entries
For 2013 Income Tax Payable P8,000 Deferred Charges-MCIT P8,000 To record application of excess MCIT against normal IT for year For 2015 Retained Earnings P12,000 Deferred Charges-MCIT P12,000 To record the expired portion of the Deferred Charges-MCIT

49. Suspension of MCIT Substantial losses on account of –
Instances when MCIT may be suspended
Substantial losses on account of –
Prolonged labor dispute
Force majeure
Legitimate business reverses
Who may suspend
Secretary of Finance upon recommendation of the CIR

50. Suspension of MCIT Definition of Terms Required documentation
Submission of proof by the corporation
Duly verified by the CIR’s duly authorized
representative
Definition of Terms
Substantial losses from prolonged labor dispute – Losses
arising from strike which lasted for more than 6 months
and which ahs caused the temporary shutdown of business
operations

51. Definition of Terms
Force majeure – Cause due to an irresistible force as
by “act of God” like lightning, earthquake, storm,
flood. Also includes armed conflicts such as war
or insurgency
Legitimate business reverses – These shall include
substantial losses sustained due to fire, robbery,
theft or embezzlement or for other economic
reason as determined by the Sec. of Finance

52. IMPROPERLY ACCUMULATED EARNINGS TAX (IAET)
RA 8424 / RR

53. CONCEPT OF IAET
Taxpayer is a corporation
Improper accumulation of taxable income beyond the reasonable needs of the business
Non-distribution of earnings/profits to stockholders
The purpose of accumulation is to avoid the payment of the income tax
Imposition of tax equivalent to 10% of the improperly accumulated taxable income

54. EVIDENCE OF PURPOSE TO AVOID THE TAX
The corporation is a mere holding or investment company
2. Earnings or profits are permitted to accumulate beyond the reasonable needs of the business

55. Concept of IAET
IAET is in addition to other taxes imposed under Title II (Income Tax);
10% tax is imposed for permitting the earnings and
profits of the corporation to accumulate instead
of distributing them to the shareholders;
As a form of deterrent to the avoidance of tax upon
shareholders who are supposed to pay dividend tax;

56. Touchstone of Liability
Concept of IAET
Tax is imposed in the nature of penalty to a corporation for improper accumulation of earnings beyond the reasonable needs of the business.
Touchstone of Liability
PURPOSE (NOT CONSEQUENCE) of accumulation of income
Use of undistributed earnings for reasonable needs of business
Determination of accumulation beyond reasonable needs of business

57. Reasonable vs. Unreasonable Accumulation
Reasonable Needs of Business:
Immediate needs of business, including reasonably anticipated needs (Immediacy Test)
Unreasonable Accumulation
Not necessary for the purpose of the business considering all circumstances of the case

58. Reasonable Needs of Business
Earnings up to 100% of paid-up capital of corp., inclusive of accumulation taken from other years
Earnings Reserved
for definite corporate expansion projects
for building, plant or equipment acquisition
for compliance with loan covenant or pre- existing obligation established under a legitimate business agreement.

59. Unreasonable accumulation of Profits
Investment of substantial earnings and profits of the corporation in unrelated business or in stock or securities of unrelated business;
Investment in bonds and other long term securities; and
Accumulation of earnings in excess of 100% of paid-up capital.

60. Exempt Corporation from IAET
Banks and non-bank financial intermediaries
Insurance companies
Publicly held corporations
taxable partnerships
GPP
Non-taxable joint ventures
Firms registered under RA 7916, 7227, and other special ecozones

61. IMPOSITION OF IAET Tax rate 10%
Corporations liable Closely-held domestic
corporations
Deadline th day after the end of he year following the close of the taxable year

62. Closely-held corporations:
are corporations at least 50% in value of the outstanding capital stock or at least 50% of the total combined voting power of all classes of stocks entitled to vote is owned directly or indirectly by or for not more than 20 individuals

63. TAX BASE OF IAET Taxable income P xxx
Add: Income subject to final tax Pxxx
Income exempt from tax xxx
Income excluded fr gross income xxx
Amount of NOLCO deducted xxx xxx
Total P xxx
Less: Div. actually or const. paid/issued xxx
Income tax paid for the year xxx
Reserved for the reasonable
needs of the business xxx xxx
Improperly accumulated earnings P xxx ===

64. Illustration Add (Deduct) Tax rates, amount and accounts GAAP Income
ND expenses 3
NOLCO
(1)
NT income
(2)
Base of ITE
30% = P ITE
TNDE 5
30% = DT
TNTI
(4)
30% = (1.20) DTL
Base of ITP
P 101
30% = P TP

65. Computation of IAET Taxable income P 101.00 Add: NOLCO P 1.00
Nontaxable income
2.00
TNTI
4.00
7.00
Total P
Less: Income tax payable
30.30
Basis of IAET P
Multiplied by IAET rate
10%
IAET P

66. Payment of IAET
Dividend must be declared and paid not later than one year following the close of the taxable year
Otherwise, IAET should be paid within 15 days thereafter
Effect of the 10%
- Once the profit has been subjected to IAET, the same shall no longer be subjected to IAET in later years, even if not declared as dividend.

67. Income Tax Forms and Due Dates

68. Quarterly Income Tax Return
Form No.
Form Name
Deadline for Filing
No. of Copies
1702Q
Quarterly Income Tax Return
(For Corporations, Partnerships and Other Non-individual Taxpayers)
60 days following the close of the first 3 taxable quarters
3 copies
Attachments Required:
1. Certificate of income payments not subjected to withholding
tax (BIR Form 2304), if applicable.
2. Certificate of Creditable withholding tax withheld at source (BIR Form 2307, if applicable).
Summary Alphalist of W/A (SAWT) per RR ;
4. Duly approved Tax Debit Memo, if applicable.

69. Income Tax Forms 1702 Annual Income Tax Return
Form No.
Form Name
Deadline for Filing
No. of Copies
1702
Annual Income Tax Return
(For Corporations, Partnerships and Other Non-individual Taxpayers)
On or before April 15
On or before the 15th day of the month following the close of the fiscal year
3 copies

70. Attachments Required:
1. Account Information Form (AIF) BIR Form AIF and the Certificate of the Independent CPA (The CPA Cert. is req’d. if the Gross sales, earnings, receipts exceed P150,000.00);
Certificate of income payments not subjected to withholding tax (BIR Form 2304), if applicable;
3. Certificate of Creditable withholding tax withheld at source (BIR Form 2307, if applicable);

71. 4. Summary Alphalist of W/A (SAWT) per RR 2-2006; 5
4. Summary Alphalist of W/A (SAWT) per RR ; 5. Duly approved Tax Debit Memo, if applicable; 6. Proof of prior year’s excess credits, if applicable; 7. Proof of Foreign Tax credits, if applicable; 8. For amended return, proof of tax payment and the return previously filed; 9. For those availing of fiscal incentives, see RMC No

72. Shall be filed in TRIPLICATE COPIES
Attachments
Shall be filed in TRIPLICATE COPIES

73. AAB’s (w/ payment)
RDO (w/o payment)

74. Deductions from the Income Tax Due
Taxes withheld from current year’s income
Tax credits for foreign taxes paid
Tax credits (tax credit memo)
Taxes paid in the first 3 quarters
Excess tax payments in the preceding year

75. ** Applicable to individual taxpayer only and NOT ON CORPORATIONS.
NOTE:
Installment Payments
** Applicable to individual taxpayer only and NOT ON CORPORATIONS.

76. Stamping of ITRs and Attachments
Revenue Memorandum
Order No

77. Policies and Guidelines:
1. All concerned Offices, including AABs, shall receive the income tax returns by stamping the official receiving seal or stamp of receipts of an internal revenue office where the said returns are filed on the space provided for in the three (3) copies of the returns.

78. 2. The attachments to the income tax returns shall also be received in the same manner as above, but for the attached financial statements the same shall be stamped received only on the page of the Audit Certificate. Accordingly, the other pages of the FS and its attachments need not any more be stamped received.
3. Taxpayer shall only accomplish and file three (3) copies of tax returns with the AAB and/or the BIR. Any tax return in excess three (3) shall not be received by the AAB and/or the BIR.

79. STATEMENT OF MANAGEMENT RESPONSIBILITY
Submission of
STATEMENT OF MANAGEMENT
RESPONSIBILITY
(RMC )

80. The contents and representations – as they are reflected in the tax returns and information statements filed with the BIR – made in their behalf by their tax agents, remain their responsibility in their capacity as the principals stated in the aforesaid returns and information statements.

81. The taxpayer is under strict obligation to check , verify and validate:
The authenticity of a tax return and/or information statement made in their behalf.
The correctness and validity of the information contained in such documents.
The liability to pay the tax payments remain the responsibility of the concerned taxpayers.

82. Any findings, errors, violations or infractions noted in the Tax Returns (together with their necessary attachments) as a result of the verification and authentication procedures made by the BIR shall render both the taxpayer and his/its tax agent civilly, and administratively and criminally liable, pursuant to existing laws and regulations.

83. Amended Audit Criteria for Taxable Years 2009 and 2010
Revenue Memorandum Order No
(dated Feb. 3, 2011)
Policies and Guidelines:
1. All taxpayers are considered as possible candidates
for audit.
2. Priority shall be given to the following taxpayers who render professional services:
* Lawyers; Doctors; Engineers; Accountants;
& Other Professionals.

84. 3. Last priority status for income tax audit shall be accorded to those taxpayers with an effective income tax rate for eighteen percent (18%). [Gross Income x 18%]
An exception to the last priority status hall be those taxpayers where there are findings/suspicions of under-declaration of sales/revenues.

85. End of Presentation
…. Exercise caution in your business affairs, for the world is full of trickery. But let not this blind you to what virtue there is; many persons strive for high ideals, and everywhere life is full of heroism ….