Taxation Straight Problem No. 5: Manny Pacquiao

hi-res-466f02c0274b7e5ac0b118afdea6c4bb_crop_northTapos na ang pagbabayad ng Annual Income Tax Return noong Biyernes. Tapos na rin ang laban nina Pacquiao at Bradley, kung saan nanalo si Pacquiao. Maiuuwi na sa wakas ang perang kanyang napanalunan. And as usual, sasabihin naman ni BIR Commissioner Kim Henares, “Taxable iyan!”

Kahit na lampas na ito sa April 15 deadline, relevant pa rin ito lalo pa’t namumurong ipipilit ni Henares na papatawan ng buwis ang naturang kinita niya. Dahil dito, lalapit naman si Pacquiao sa iyo at hihingi ng tulong sa pagkuwenta ng buwis na babayaran niya. Paano mo tutulungan ang ating Pambansang Kamao? Solve his problem using all that you learned in Taxation:

From Bleacher Report:

“According to Bad Left Hook’s Scott Christ, Pacquiao’s full guaranteed purse is $20 million, while Bradley will get at least $6 million as part of their respective shares in pay-per-view revenue.”

“As for the money, Yahoo Sports’ Kevin Iole shared the purse payouts for the entire card:”

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Manny Pacquiao is happily married to Jinkee Pacquiao. Together, they have five children, Emmanuel Jr. (Jimuel), Michael Stephen, Mary Divine Grace, Queen Elizabeth and Israel.

Assume that his purse money on the fight is his sole income for the year. Disregard U.S. Tax Effects.

  1. His winnings against Timothy Bradley will be subjected to what kind of tax?

A. Excise Tax

B. Basic Tax

C. Passive Income/Final Withholding Tax

D. Other Percentage Tax

  1. What will be the period covered by the tax?

A. Fiscal Year 2015

B. Fiscal Year 2016

C. Calendar Year 2015

D. Calendar Year 2016

  1. What will be his classification?

A. Resident Citizen

B. Non-Resident Citizen

C. Special Filipino Employee

D. Exempt

  1. How much is his personal exemption? How much shall be his additional exemptions?
  2. How much is his tax still due? Show supporting computations.
  3. Same question, this time use manual or electronic BIR Forms.
  4. Assume that today, April 18, Pacquiao will file and pay the tax. Would your answer be different in this case? Show supporting computations.

Taxation problem prepared by: TweetNewscaster


Featured Image Credit: Pacquiao and Bradley, from Bleacher Report.

 

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