(Article published in the Sep 24, 2008
issue of Manila Standard Today)
Last Thursday, as in many, many years past, I attended a ritual held annually at the UP Law Center. So also did the Presiding Justice and a Justice of the Court of Tax Appeals, several tax professors, many bar and pre-week reviewers, a few tax practitioners, and others who, rightly or wrongly, the UP Law Center considers as having some knowledge, more or less, about Taxation. The lunchtime ceremony, hosted by Professor Eduardo A. Labitag, is held on the Thursday immediately following the Sunday when the Supreme Court administers the Bar examination in Taxation.
Since at the University of the Philippines, as elsewhere, there is no such thing as a free lunch, those who attended had a task before them: to come up with a common set of “suggested answers” to the bar examination questions in Taxation. Consequently, for those who are invited by the good professor, it is a must-attend unless he or she is willing to run the risk of being suspected, at risk of conscience or convenience, as the examiner for the subject. The certainty of being suspected the examiner is so great that, in 2001 and 2003, when I was in fact the examiner in Taxation, I purposely attended –even made a comment or two unflattering to the way the questions were crafted-- to make sure I escaped detection.
year, it must have been due to the cumulative nutrition from all that nilangang
baka, sariwang lumpia, and fish cooked in some sort of way served and
consumed as they had always been at least for the last 5 years on the same
occasion, it occurred to me that not much substantial have changed since the
first time I participated in the process, way back in the seventies when I
was still feeling young and full of hope.
Never was there a set of perfect questions that everyone around the table thought capable of being answered in one and only one way; there always was found an ambiguity or two, some wayward phrase and fractured English that obscured what precisely it was the examiner was looking for, some subject matter asked outside of the scope announced to the Law Deans and the Bar Reviewers by the Bar Confident prior to the examinations, some question perceived to be better suited to those aspiring to be Certified Public Accountants and than to those hoping to become lawyers.
At the end of the session, which promptly ends no later than 2:00 p.m. on the able steering of the discussion’s chair, Professor Edwin Abella, there are always a handful of students at the corridor, wailing that the examination was too hard and pleading that we relay to the examiner, whoever that might be, to be merciful and kind. And the ceremony is not complete without the appearance somewhere of Professor Bart Carale, with his anecdote of the day. This year, he tells me that this current adminstration’s method of accounting of transactions has three booking operations: debit, credit, and kupit.
After all this time, it is really the heart-wrenching pleas of the bar examinees at the corridor as well as the iconoclastic “jokes” of Bart Carale that have kept me coming back year after year to the yearly ritual at the UP Law Center. The task of preparing the “suggested answers”, albeit with the honor of being in the company of the country’s top tax experts, has for me somehow, without meaning to underrate my esteemed colleagues nor to downplay the usefulness of our work product, lost some luster. Every year almost the same old dissatisfactions keep manifesting themselves, many legitimate criticisms of examination questions.
This year, for example, observations were made that it was not clear, from the tax experts’ reading of questions, whether the examiner was looking for a fine point of law, or was simply not aware of it in Question VI. The question spoke of a gross estate that did not exceed the allowable deductions and the examinee was asked whether the estate is liable for the estate tax. What was not clear was whether the examiner had only wanted to know if the examinee knew how to compute for the estate tax, in which case he would consider the answer “No” as correct. Or, whether the examiner instead, wanted the examinee to say “Yes”, but add that indeed the estate is “liable”, i.e. is subject to the estate tax, but, that no tax would have to be paid because there was nothing left no taxable net estate after the allowable deductions.
Question X by way of another example was obviously intended to determine whether the examinee knew the difference in tax consequence when, on the one hand, a share of a listed company is traded in the stock exchange and when, on the other hand, it is sold directly. Unfortunately, because the first type of transaction is subject to the percentage tax, it was observed that the examiner may have unfairly asked on a matter outside of the declared scope of the examination.
Not a few eyebrows were raised when the discussion came to Question XI which asked whether the tax assessment made on the basis of the given facts was correct. Question XI was simply a test of whether the examinee knew the requirements of a valid internal revenue tax assessment. However, the question talked about the imposition of a deficiency tax on an individual at the rate of 35%. The speculation was that the examiner forgot that the top tax rate for individuals has never been, under the current code, 35%. It started at 34% when Tax Reform Act of 1997 took effect in 1998, and, had since gone down yearly by 1% until it stayed at 32% from 2000 and onwards.
Despite these “imperfections”, as well as the perennial complaints of being more suited for the accountancy board exam (even if the computation required is the most basic), of being too difficult (meaning many reviewers failed to take the matter up at their Pre-Week), of being similar to questions in the tests given by the suspected examiner when he was teaching, etc. I still consider this year’s test testing enough, and the defects inconsequential. But unfortunately, what to us who are already lawyers is minor can to a bar examinee seem major; in fact so major a flaw as to be, almost always, confusing, if not discouraging.
Instead of answers to an exam already given, I suggest that the group assembled by the UP Law Center and/or the Law Deans come up, soon after the coverage of the bar examinations is announced by the Supreme Court, with 1,000 or so questions that they consider will sufficiently test whether a prospective examinee knows enough of tax law that is needed by a general law practitioner. These suggested questions, and their answers should then be published and made available to the bar candidates when they file their application to take the exams.
To make the bar candidates seriously study these suggested questions and answers, the Justice of the Supreme Court who is chairman of the examiners, could then encourage, if not “request” the examiner to simply select the questions to be asked in the examination exclusively from among those suggested by the committee. The examiner may perhaps change a detail or two, just to ensure that examinee will not just memorize the answers, but he or she ought not change anything material in the question. This, I am certain, will do away with all the criticisms (sometimes legitimate at other times otherwise), that have become permanent complaints after every tax exam.
Some may object to my proposal by pointing out correctly that, under my idea, all that the candidates will have to do in order to pass the Taxation Examination would be to study the suggested answers and questions. My reply is, so? If the UP Law Center Committee does its job well by covering every important aspect of the subject, then a candidate who studies and answers well the 1000 or so suggested questions and answers will have acquired, simply by so doing, the tax knowledge required of a general tax practitioner. And isn’t that all that the tax bar exam is expected to make sure of?