Download - The Problem up to Definitions of Terms
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THE PROBLEM
Statement of the Problem
The study aims to determine the VAT awareness among 4th year students
taking up Bachelor of Science in Business Administration major in Financial
Management at the University of San Jose-Recoletos.
Specifically, this study seeks to answer the following:
1. What is the profile of the student in terms of:
1.1 Gender;
1.2 Age;
1.3 Year Level?
2. What is the respondent’s extent of awareness about VAT in terms of:
2.1 Background or History of VAT.
2.2 Purpose or use of VAT.
2.3 Government regulations concerning collection of VAT.
2.4 Government agency tasked which collecting VAT.
3. Based on the results of the study, what proposals for improvement can be
developed to raise the level of awareness about VAT?
SIGNIFICANCE OF THE STUDY
The study will benefit different groups of individuals. Including:
The Respondent
The students will as a means of knowing their level of understanding
regarding the Value-Added Tax; such that the study will provide a means of
verification of knowledge or indicate a need of improvement, depending upon
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whether the results will confirm a high or low percentage and how this level of
knowledge will affect their daily economic decisions.
The Researchers
Through this study, the researchers will be able to apply theory-based
studies into an actual research work. They will be able to realize significance of
value added tax to the Filipino.
The Readers
This will become the readers’ source of information about the impact of
value added tax to every tax payers.
The Future Researchers
This study will serve as additional information and guide for their work that
engages taxes.
The College of Commerce
The study will serve as a guide to the effectiveness of its curriculum since
the study reflects the value added tax awareness in a subject which is a core
component of business knowledge. The study would give the administrators an
idea on what aspect of the business education is effective indicating a high level
of awareness or needs improvement if the results show otherwise.
The Government Agencies
Government agencies concerned, particularly the Bureau of Internal
Revenue, will have a general idea regarding the state of knowledge
dissemination of the Value-added Tax. The results can serve as a basis for
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starting a knowledge campaign to every Filipino, strengthening their
understanding of the Value-added Tax.
DEFINITION OF TERMS
The key terms in the study are given the following operational definitions.
BIR Ruling
This refers to an official administrative interpretation by the Bureau of
Internal Revenue of a particular provision of the National Internal Revenue Code
or implementing Revenue Regulations. Normally, a BIR Ruling does not include
administrative interpretation of concomitant interpretation of a VAT provision.
Business
Is synonymous with “trade” and is used interchangeably with the phrase
“trade or business.”
Cascade
Casading of the tax occurs when the tax is part of the taxable base that
will be taxed. Casading does not take place in the VAT system because the input
tax on taxable purchases has been credited against the output tax on taxable
sales.
Code
Unless otherwise specified, “Code” refers to the National internal Revenue
Code, as amended by R.A. 7716, 8241, and 8424.
Exempt transaction
Means the sale or leasing of goods and properties and the performance of
services, which are specifically listed and expressly exempt from VAT under
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S3ction 109, although such transactions are undertaken in the course of trade or
business.
Expenses
This represents a cost that is “paid” or “remitted”, usually in exchange for
something of value.
Financial Management
Means the efficient and effective management of money (funds) in such a
manner as to accomplish the objectives of the organization.
Governance
The way that a city, company, etc., is controlled by the people who run it.
Government
This refers to the system by which a state or community is governed.
Gross receipts
A tax term relating to the total business revenue from services provided
that must be reported for the fiscal period. Gross receipts do not account for
sales returns and allowances, cost of goods sold or any other deductible
expenses. Gross receipts can include both rental and interest income.
Gross sales
A measure of overall sales that isn't adjusted for customer discounts or
returns, calculated simply by adding all sales invoices, and not including
operating expenses, cost of goods sold, payment of taxes, or any other charge.
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Input
The purchase by a taxable person from another taxable person (who is
also a seller) are concomitantly sales transactions. From the perspective of the
purchaser, it constitutes and “input” which means the same as, and will be used
interchangeably with, taxable purchases.
Input tax
Means the VAT due from or paid by a VAT-registered person on
importation of goods or local purchase of goods or services, including lease or
use of property, in the course of his trade or business, from a VAT-registered
person. It includes transitional and presumptive input taxes perspective, input tax
is the VAT on the sales that shifted by a VAT-registered person to such buyer
who is also a VAT-registered person.
Money
This refers to any object or record that is generally accepted as payment
for goods and services and repayment of debts in a given socio-economic
context or country.
Non-VAT Person
Is a person who is engaged exclusively in the business of selling goods
and supply of services that are exempt from VAT.
Output
This means the same as, and will be used inter-changeably with, “taxable
base” and or the amount of sale, barter or exchange of goods and supply of
services which are subject to VAT.
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Output tax
This means the value-added tax due on the sale or lease of taxable goods
or properties or services by any person registered or required to register under
Code 236. In other words, it is the amount determined by applying the
appropriate rate of VAT on the sale or lease of goods, properties or supply of
services by a taxable person.
Regulations
This refers to the Revenue Regulations promulgated by the Secretary of
Finance upon recommendation of the Commissioner of Internal Revenue to
implement the provision of the National Internal Revenue Code or other special
law which is administered by the bureau of Internal Revenue.
Revenue
This refers to money that is collected for public use by a government
through taxes.
Sale
This is used in the textual discussion means “sale, barter or exchange.”
The only differences between the connotation of the terms “sale”, “barter” or
“exchange” lie in the nature of the consideration for the transfer of goods or
properties and supply of services. Consideration may consist of money,
something other than money or party something else.
Services
This includes leasing out of personal or real, tangible ornintangible
property.
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Taxable
Unless otherwise qualified when used to describe a transaction or a
person, the word means subject to VAT.
Taxable base
Means the amount or value on which the VAT rate will be applied in
computing the output tax. The taxable base for sales of goods or properties is
computed under the accrual method of accounting. The taxable base for supply
of services is computed under the cash method of accounting. The regulations
also permit, under certain conditions, the determination of the taxable base under
the installment method.
Taxable person
Is any individual, trust, estate, partnership, corporation, joint venture or
cooperative or association who makes, or intends to enter into taxable
transactions for which he is liable to pay VAT. Specifically, he is a person who is
1. Required to register and has actually registered with the appropriate Revenue
District Office; 2. Required to register but has opted under certain prescribed
conditions to register for purposes of VAT; and 3. a person who is compulsorily
required to register but has not registered.
Taxation
This refers to the act of a taxing authority actually levying tax. Taxation as
a term applies to all types of taxes, from income to gift to estate taxes. It is
usually referred to as an act; any revenue collected is usually called "taxes."
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Transaction
This means the sale, barter, exchange or leasing of goods and properties,
and the supply of services entered into by person who may be a taxable person
or exempt person.
USJR
University of San Jose-Recoletos, it is a catholic private university founded
in 1947 in Cebu City, Philippines by the Order of Augustinian Recollects. From
classes held in an old building and a portion of the convent, the school built
modern structures while retaining classic features.
VAT
Value added tax, indirect tax on the domesticconsumption of goods and
services, except those that are zero-rated (such as food and essential drugs) or
are otherwise exempt (such as exports). It is levied at each stage in the chain of
production and distribution from raw materials to the final sale based on the value
(price) added at each stage.
RESEARCH DESIGN
Research Methodology
This study will use the descriptive method of research. A survey will be
conducted using questionnaires. Interviews will be done to clarify the quantitative
results of the study. For the sources of data, the researchers will examine related
documents on Value-Added Tax.
Survey forms will be used in gathering data. The questions will be
formulated in such a way that responses would reflect the personal profile of the
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Financial Management students. Interviews questionnaires will also be used to
gather the needed data.
Research Environment
The research will conduct the study at the University of San Jose-
Recoletos main campus. It is situated along Magallanes Streets and Corner P.
Lopez in Cebu City. The opposite side of the university is the Freedom Park or
commonly called Carbon. The adjacent building is the Our Lady of Mt. Carmel
Parish-Recoletos. At the back of the building is the Borromeo Plaza II located at
Borromeo Street Corner P. Lopez.
The University of San Jose-Recoletos formerly known as Colegio de San
Jose-Recoletos was founded by the Order of Augustinian Recollects in 1947.
From classes held in an old building and a portion of the convent, the school built
modern retaining classic features.
The university expanded, while all the time developing QUALITY
CHRISTIAN COMMUNITY-ORIENTED EDUCATION. Three campuses, the main
campus located along Magallanes Street and Corner P. Lopez; the Basak
campus at Cebu South Road, BasakPardo, Cebu City and the newly built
Balamban Campus located in Arpili ,Balamban.
On September 21, 1984, then CSJ-R attained the UNIVERSITY STATUS.
Spanning years of accreditation and re-accreditation, USJ-R, Level 3, PAASCU,
was granted AUTONOMOUS STATUS by CHED in 2001.
The curricular programs of USJ-R evolved from traditional to innovative
course offerings. Arts and Sciences (started as liberal arts in 1947); Education
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(1947); Commerce (1948); Engineering (1961); Bachelor of Laws (1957); and the
Graduate School (1962). In 2003, the College of Information, Computer and
Communications Technology was created. The Expanded Tertiary Education
Equivalency and Accreditation Program (ETEEAP) followed in the same year. On
April 1, 2004, the Vertical Alignment of the undergraduate and graduate schools
took effect which established five graduate schools: Graduate School of
Business and Management, Graduate School of Arts and Sciences, Graduate
School of Information Technology and Computer Studies, Graduate School of
Education and Graduate School of Engineering. In June 2004, the B.S. in
Nursing started its first operation.
The College of Commerce is the largest and fastest growing college of
USJ-R. It offers courses such as Bachelor of Science in Accountancy, Bachelor
of Science in Business Administration, Bachelor of Science in Tourism and
Bachelor of Science in Hospitality Management.
The Bachelor of Science in Business Administration is divided into major
studies such as the General Course, Financial Management, Human Resource
Management, Marketing Management and Entrepreneurship.
In the College of Commerce taking up Bachelor of Science in Business
Administration Major in Financial Management, there are approximately 600
students.
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Figure 2: Location
Research Respondents
The respondents of the study will be 4th year students of the University of
San Jose-Recoletos enrolled in Bachelor of Science in Business Administration
major in Financial Management. This is to ensure that only those who have
undergone the two tax subjects with topics on value added tax will be interviewed
since they will by now have passed the subject. The researchers are not included
of this study.
Research Instrumentation
The researchers will use the self – made questionnaire as their main
instrument in gathering information regarding the profile, the history of value
added tax, the use and purpose of VAT, ideas related in government regulations
concerning collection of VAT, and the government agency which was tasked in
collecting VAT, the effectivity of the practices used by the students of the
University of San Jose-Recoletos. The questions were carefully studied and
properly organized in the questionnaire.
The questionnaire has three sections. The first section contains the profile
of the respondent’s base on their profile background.
The second section contains sets of questions on extent of awareness
about VAT in term of the history of value added tax, use, computing of VAT,
government regulations concerning collection of VAT, and Government agency
tasked which collecting VAT.
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Each question will be followed by a number of possible responses.
Corresponding to each response are numbers followed by qualitative scale and
their meanings, which are the following:
4 – VERY AWARE (VA) - means that the respondent is aware of all the
areas regarding VAT.
3 - AWARE (A) - means that the respondent is aware of
majority of the areas regarding VAT.
2 – LESS AWARE (LA) - means that the respondent is aware only of
some of the areas regarding VAT.
1 – NOT AWARE (NA) - means that the respondent is not aware of
anything about VAT.
The respondents were instructed to put a check mark on the space
provided each number, which represented their response to the questions.
The third section which was an additional data determined if the results of
the study were effective and suggestions for the improvement of the level of
awareness about VAT.
Data Gathering Technique
The researchers will personally give a letter to the Dean of College of
Commerce from University of San Jose-Recoletos to formalize the request to
conduct their research study about the level of awareness of Value-Added Tax.
After the letter will be approved, the researchers will immediately start to conduct
their data gathering.
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Data Analysis
After the answered questionnaires will be retrieved, the researchers
will process the data gathered for more accurate results. The data will be
grouped and tabulated.
The percentage methods will be used in analyzing the gathered data of
the profile of the respondents. The computed weighted mean will used to show
the results of the level of awareness of value-added tax among selected
Financial Management students.
The formula for the simple percentage is presented below:
P = f / n x 100
Where:
P = percent
f = frequency / number of responses
n = total number of respondents
100 = constant number used to convert into percent
For the computation of the weighted mean, the following was used:
μ= ∑ fx /n
Where:
Weighted mean
f= number of respondents
x = weigh assigned to each scale
n = number of respondents
Summation sign
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The following weights will be assigned to each scale:
4 - VERY AWARE (VA)
3 - AWARE (A)
2 - LESS AWARE (LA)
1- NOT AWARE (NA)
To arrive at a definite interpretation of the results for each item, the
researchers assigned presumed range of each scale.
The following is the interpretation of the each assigned weighted mean
thus:
Weighted Mean Range Interpretation
3.26 – 4.00 VERY AWARE
2.51 – 3.25 AWARE
1.76 – 2.50 LESS AWARE
1.00 – 1.75 NOT AWARE
The responses on the level of awareness of value-added tax will be
classified into the following indicators:
4 – Very Aware (VA) - means that the respondent is aware of
all the areas regarding VAT.
3 - Aware (A) - means that the respondent is aware of
majority of the areas regarding VAT.
2 – Less Aware (LA) -means that the respondent is aware
only of some of the areas regarding
VAT.
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1 – Not Aware (NA) -means that the respondent is not aware
of anything about VAT.