(Article published in
TODAY, Business Section)
must think I am crazy. Again
and again, someone comes to me asking whether the rumor is true, that I am
the examiner for Taxation in the second day of the 2004 bar examinations
this coming Sunday. No!
No! No! I am not the examiner for Taxation for the 2004 Bar Exams.
have not yet recovered from the ordeal of correcting the test booklets of
the 2003 bar exams, coming as it did after only a year of respite from an
earlier, but just as arduous, stint
as the examiner for the same subject in 2001.
I continue to wake up with a cold sweat every now and then from
nightmares of those endless hours, of early dawn and late night, reading
the same answers over and over again, day in and day out, in various forms
of tortured English, put on paper by the most illegible hands.
make everyone believe that I am not the taxation examiner, here are some
tips I am giving, gratis et amore,
to this year’s examinees as well as to the real examiner.
My tips for the examinees are not on what questions will be asked
(that is for the current pre-week reviewers to guess, or more precisely,
invent) but, instead, on how to answer the questions in Taxation, and, if
it is not yet too late, in other subjects as well.
My tips for the examiner, if this is his or her first time, relate
to what the examinees may or may not come up with, regardless of how easy
or difficult the questions might be.
tips for the examinees.
No. 1. Your answer must give what is asked for by the question. If the
question asks “why” or “explain”, do not, as some examinees did
last year, begin your answer with “yes”, or “no”.
For example, the very first question last year was “why is the
power to tax considered inherent in a sovereign state?”
Imagine the kind of, literally, first impression that was given by
this answer: “Yes. Inherent to the powers vested upon a sovereign state is the power
No. 2. Your answer must be consistent.
Question II last
year was “May Congress, under the 1987 Constitution, abolish the power
to tax of local governments?”. An examinee
replied: “Yes, the enactment as
well as abolishment of tax statutes is vested in the legislature or the
Congress; but no, the Congress do not have the power to abolish the taxing
power of local governments.” In
Question XII, I asked whether a certain local ordinance was valid, an
answer was, “Two things.
It is valid and unconstitutional.” When in Question III, I asked who was legally liable for the
fringe benefits tax, an examinee said: “The
employee is the only (sic) liable.
Alternative: Employer is held liable.”
To Question V, of whether actual, moral, and costs awarded by the
court to a plaintiff was taxable income, an answer was “No,
all the awards cannot be considered as income on the part of X, hence,
question of whether stocks dividends are subject to the income tax
(Question VII), seems to have a bewitching effect on examinees. An
examinee said, “Yes.
The stock dividends received by X are not subject to income tax.
They are part of the gross income.”
Another answered, “No.
stock dividends are not subject to income tax itself.
What is subject to income tax is the dividend issued by the
corporation to its stockholders.”
Reading these responses at 4:00 a.m., I was tempted to wake the
neighborhood with a curdling primal scream.
No. 3. Hide your ignorance. If
you can, try instead to convince the examiner that you know the subject
matter fairly well. Dead
give-away that you are not ready to be a lawyer are the following answers
to the question of whether contributions to the political
campaign of a candidate is subject to tax: (a) “the amount of P150,000 given to Y is not subject to donor’s tax but
rather be subject to a gift tax.”; (b) “if
X ask me I tell him that it is not a donors tax, it is a gift tax because
donor’s tax is something while gift tax is thing”. Also very
revealing of the examinees knowledge is this response to the question of
to whom a taxpayer may bring an appeal against a local tax ordinance (Queestion
XIV): “He can appeal to the
Secretary of Appeals.” An
examiner almost impressed me that he knew all the exceptions to the bank
secrecy law, but blew it when, perhaps because he forgot the last one of
several items, wrote “among others.” And I
was impressed more by the examinee’s imagination than his knowledge of
taxation, when he wrote, distinguishing capital from ordinary assets as
follows: “Capital assets are those
that are solid properties, while ordinary assets are those that are
No. 4. Avoid big words or
latin phrases if you do not know exactly what they mean.
For example, “the
action sought by the taxpayer is one that may be sue generis, that
is, a taxpayer’s suit.” In
the first place, the proper latin term is “sui generies”.
Secondly, it means “one of a kind” or more literally, “a
class by itself”. Certainly not, “taxpayer’s suit.” Another example, “The
power to tax is inimical to the existence of the state”.
What may have been meant is the basic principle that taxation is
essential to the existence of the state.
No. 5. Do not get carried
away by the intensity of your convictions.
I asked what the examinee thought of a tax imposed by the City Mayor on
the use of elevators in the City Hall, said, “What
does the Mayor think of the high-tech elevators in the City Hall? Rides in
a fair? To drop a peso coin for its use?”.
Another was, however, most respectful, when he said, “In
the case at bar, as the Father of the City, the Mayor of Makati City
cannot demand from the individual concern as to the P1.00 elevator tax
because it is prejudicial and against public policy and order.”
All I wanted, in Question 1, was an explanation of why the power to
tax was inherent in a sovereign state and this was what I got: “As
in a mother to her child, from the time of conception to the giving of
birth; up to the formative years; and even up to the moment of death as
what Mother Mary exemplified when She stood at Her Son’s grave, the
closeness, the inseparability, the intimacy is intertwined that such power
of taxation can not be without for a sovereign nation to exist and
tips for the examiner, even if he or she is not a first timer.
No 1. You may wish to give
due credit to practical knowledge.
instance, conceded some points to this answer (entirely wrong actually) to
the question on political contributions, that said, “under
BIR rulings, donation to political parties are taxable only when reported.”
No. 2. Be patient with the examinees’ manner of expression.
On the validity of
the elevator tax, I was told, “No, the elevator tax is not a valid imposition for they (I suppose
meaning the elevators) are not
immobilized by destination.” On
what a capital asset is, an examiner wrote, “capital asset is the heart and soul of a corporation”.
And on whether proceeds of life insurance are subject to income
tax, “No, it is not an income…it
is a benefit, because income fruit and a tree.”
The tree/fruit analogy is bound to crop up in unexpected places.
To distinguish capital from ordinary asset, an examinee said, “the distinction between a capital asset is that the root of the tree, on
the other hand ordinary asset are fruits of the trees”.
finally, Tip No.3. Be prepared for prayers. Some will be addressed to
you, such as “Maam/sir: Please
help me pass. I beg you! I
tried so hard already.” Others
are addressed to God himself. This
one wrote, “Honestly, Lord, I haven’t read this rule. Please forgiven
and have mercy on me” and followed it with the Hail Mary.
One answered Question VIII, after leaving Question VII blank, as
follows: “I implore you in my
undertaking to be lawyer, Open my mind to remember all the knowledge I
acquired thru my reading and in the lectures I had attend
to give me light to discover the issues raise
in this bar questions so that I may answer this
serenity to accept whatever is the will and always to show me the correct
path for your greater glory. Thank
you so much Lord God for all the guidance, wisdom, knowledge and
one is sure to tug at your heart: “My
handwriting is a result of an illness which I hope, in God’s time, I
will get off. Please be patient with my answers and my handwriting.
I just want to be a lawyer. Thank
you. God bless us all”. He
did not stop there he went on, saying,
“I know I have not fared well in these exams but that will not be a bar
to my keeping some hope in my heart.
Thank you, dear Examiner.”
no one, I think will beat this examinee who gave it all he’s got: “I
am a disabled person; the underprivileged and less opportunity.
A lowly stationed in life. I
am a disabled person and a destitute journeyman.
I am begging/asking your earnest favor; please, please and kindly
accommodate/assist myself to pass this prestigious/laudable Bar subject.
Thank you.”. Then
he concluded, “More
power and God bless. Principium
sapientiate Domini. Shalom”.
I trust all the foregoing will put to rest whatever may still be lingering doubts. But, even if I were the examiner, did you guys think I will admit it?