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CHAPTER 1

THE PROBLEM AND ITS BACKGROUND


Introduction
Taxation refers to the inherent power of the state to exact an enforced
contribution from persons, property or rights for the purpose of generating revenues for
the use and support of the government. Its primary purpose is to raise revenues to
enable it to carry out its appropriate function. The power of taxation is based upon the
theory that government cannot exist without taxation, thus taxation is an important
necessity (Litonjua & Litonjua, 2013). It is like the bread and butter or the lifeblood of the
government. Hence, the collection of taxes must keep going.
A business is described as trade or commercial activities which are regularly
engaged in as means of livelihood or with a viewpoint of obtaining profit. The sales of
goods and services related to trade, profession or business in the Philippines are
generally subject to business taxes, except when exempted as provided by law
(Valencia & Roxas, 2016). There are three (3) kinds of business taxes in the Philippines
as classified by the Tax Code. These are Value-added Tax (VAT), Other Percentage
Taxes (OPT) and Excise Taxes (ET). In a practical manner, all business taxes are
indirect taxes, the cost of which could be shifted on to the buyers.

In relation to this, compliance with the tax law typically means: a) true reporting of
the tax base; b) correct computation of the liability; c) timely filing of the return; and d)
timely payments of amounts due. Not complying with the law will lead to penalties
and/or surcharges ordered by the Authority. The people, whether currently a taxpayer or
not, must have the knowledge about taxation and understand the tax regulations.
Without this knowledge, the conflict arises such as not paying the imposed taxes or not
filing the required return on due dates and worst, making it as an excuse to escape from
obligations. This study will assess the Level of Effectiveness and Awareness of
Business Tax Management of stores in the University of the Philippines (UP) Teachers
Village.
Background of the Study
University of the Philippines (UP) Teachers Village, known as Maginhawa, is a
great destination for people who love to eat varieties of foods and drinks. Maginhawa
and few surrounding streets in Quezon City became popular neighborhoods for those
seeking new restaurant experiences. Since they offer a unique, nice presentation, and
remarkable taste of foods, they are well known not only to people residing in the
Quezon City village but also to those who came from different places in Manila. The
prices are quite affordable and worth buying.
Based on 2014 figures provided by the Philippine Statistics Authority (PSA), there
are 946,988 establishments in the Philippines. Of these, 99.6% (942,925) are micro,
small and medium enterprises (MSMEs) and the remaining 0.4% (4,063) are large
enterprises, and the UP Teachers Village is a part of these MSMEs. Being part of
MSMEs and knowing that they are getting a lot of attention from people, the researchers

had the desire to know about the level of awareness and effectiveness of business tax
management in UP Teachers Village.
There are many issues in the Philippines regarding taxes. The Tax Management
Association of the Philippines (TMAP) claims that Filipinos pay the highest tax rates
among countries in the Association of Southeast Asian Nations (ASEAN). On the other
hand, an issue about lowering tax rates was mentioned in the State of the Nation
Address (SONA) 2016. President Rodrigo Duterte confirmed that his administration will
aggressively pursue lower tax rates in his first State of the Nation Address last July 25,
2016, Monday. My administration will pursue tax reforms towards a simpler, more
equitable and more efficient tax system that can foster investment and job creation. We
will lower personal and corporate tax rates," he said during his Address.
In the case of developing countries like the Philippines, taxation is an important
matter to be considered. From the past until now, one of the major problems in the
Philippines is corruption, wherein it reduces the available funds and increase
government losses. The money collected goes to the wrong people with a wrong
purpose. With the knowledge about these issues, it is reasonable to find out the level of
awareness and effectiveness in one of the top food destinations in Manila.
Theoretical Framework
Taxation is a means by which governments finance their expenditure by imposing
charges on citizens and corporate entities. Meaning, it is the source of revenue for the
government to encourage or discourage certain economic decisions. Whereas, the
Bureau of Internal Revenue is the primary revenue-generating (body) in the country,

which needs all the support it can get to inculcate awareness about taxation and its
importance. The people must have a knowledge and understanding of tax regulations,
due to meet tax obligations. Taxpayer awareness has a positive effect on tax
compliance. Becoming aware with the importance of paying taxes, and what benefits it
can bring to the country, the people will better understand the importance of paying
taxes. Under the Proclamation No. 812, President Gloria Macapagal Arroyo declared
the month of April 2005 as Tax Awareness Month on the 21 st day of March 2005. This
serves as a step towards promoting, enhancing and stilling nationwide awareness and
appreciation of the importance and value of taxes to the society.
In the Theory of Planned Behaviour by Ajzens (1991), human behaviour is
guided by three kinds of considerations: (1) beliefs about the likely outcomes of the
behaviour and the evaluations of these outcomes (behavioural beliefs), (2) beliefs about
the normative expectations of others and motivation to comply with these expectations
(normative beliefs), and (3) beliefs about the presence of factors that may facilitate or
impede performance of the behaviour and the perceived power of these factors (control
beliefs). In their respective aggregates, behavioural beliefs produce a favorable or
unfavorable attitude toward the behaviour; normative beliefs result in perceived social
pressure or subjective norm; and control beliefs give rise to perceived behavioural
control. The theory states that attitude toward behaviour, subjective norms, and
perceived behavioural control, together shape an individual's behavioural intentions and
behaviours.

It relates to the awareness of the taxpayer. Taxpayers, who are aware of the tax,
will know through the behavioral belief of the favorable benefits of paying taxes, its
importance to help the government finance its costs in providing the public needs. A
person, complying with tax regulations because of social normative pressures or the
normative expectations of others in paying taxes is caused by its normative beliefs. It
encourages every taxpayer to have the confidence and decide to become an obedient
taxpayer which pays their tax obligations, linking to the effectiveness of the tax system.
According to the self-awareness theory by Duval and Silvia (2001), when people
focus attention on the self, they compare the self with standards, try harder to meet
standards, and show stronger emotional responses to meeting or failing to meet a
standard. The tendency to change the self to match a standard depends on other
variables, particularly perceptions of how hard it will be to attain the standard. Duval and
Wicklund proposed that, at a given moment, people can focus attention on the self or on
the external environment. Focusing on the self enables self-evaluation. In the objective
of self-awareness, it means that a person focuses their attention on the self and his

behaviour, which allows him to evaluate what he sees based on the standards and
expectations that he has developed throughout his life.
Tax awareness of a taxpayer refers to the satisfaction and pride for fulfilling tax
obligation when it is due. It also refers that tax is likely to be a duty of every citizen,
therefore paying the tax is a prior expenditure. People are expected to follow the
requirements given by the Tax Code because the public pay taxes for the reason that
this is what our law says. In connection, a business owner views his business separate
from everything else; the owner will evaluate his business based on the standards that
is expected on how a business should work. The taxpayer will become conscious and
aware of the importance of complying with the requirements of the Tax Code.

Conceptual Framework
INPUT
Profile

Age

Sex

Position in the store

Length of Service

Highest Educational
Attainment

Frequency of training attended


about tax

Profile of the company

Form of the Business


Organization

Years of Operations

Capitalization

Number of Employees

Profile of the Business tax


Practices

Taxes Files and Paid

Frequency of Tax Filing and


Tax Payment

Duties and Responsibilities

Use of Computer

Frequency of Tax Review


Perception of the organizations
Management People

Registration

Keeping the accounting


books/records

Issuing official receipts and


sales invoices

Filing of the Monthly Valueadded Tax Declaration

Paying the Tax

Civil Penalties and


Surcharges

PROCESS
Survey
Questionnaire
Personal Interview
Documentary
Search
Readings

Statistical Analysis
Frequency
and
Percentage
Ranking
Weighted Mean
One Way ANOVA

OUTPUT
Policy Recommendation for:
Improving business tax
compliance by
establishing
transparency to the
public with regards to the
inflows and expenditures
of revenues from the
collection of business
taxes.
Disseminating programs
for taxpayer education
which includes
organizing seminars for
existing and aspiring
entrepreneurs.
Inducing a relatively
large number of
researchers to engage in
extensive researches
and studies regarding
business tax
administration and
compliance.
Improving the
implementation regarding
business tax programs

within the management


Enhancing the
performance of the
people involved in tax
management with
respect to awareness of

Problems with regards to its


compliance with the BIR.

business tax
Advancing activities
involving tax knowledge
among persona involved
in tax management

Feedback
Figure 1. Conceptual Paradigm

The conceptual framework discussed the flow of the study to be taken. The study
used the systems approach. The system of three (3) frames is composed of input which
went through the process or operation and emerged as the output.
The input contains the leading variables regarding effectiveness and awareness
of business tax management of stores in UP Teachers Village. It includes personal
profile of the respondents. In addition to that are the problems encountered by the
company regarding its tax management and its proposed solutions.
The process consist the methods and procedures to be used to analyze those
variables by using surveys, conducting personal interview, and analyzation of data
obtained from the respondents.
The output contains the perception and conclusion of the researchers regarding
the effectiveness and awareness of business tax management of stores in UP Teachers
Village. It also contains policy recommendations that the researchers suggested for the
improvement of the management with regards to their awareness and effectiveness of
business tax management.
The arrows show the relationship between each during the research. On the
other hand, the feedback loop connects the output to the process involved as well as to
the input. It made the system continuous.

Statement of the Problem


This study aimed to assess the effectiveness and awareness of the Business Tax
Management of the selected stores in UP Teachers Village. This study specifically
seeks answers to the following questions:
1. What is the profile of the store in terms of
1.1. Personnel involved in the tax practices
1.1.1. Age
1.1.2. Sex
1.1.3. Position in the store
1.1.4. Length of Service
1.1.5. Highest Educational Attaintment
1.1.6. Frequency of training attended about tax
1.2. Profile of the company
1.2.1. Form of the Business Organization
1.2.2. Years of Operations
1.2.3. Capitalization
1.2.4. Number of Employees
2. Profile of Business Tax practices
2.1. Taxes filed and paid
2.2. Frequency of tax filing
2.3. Frequency of tax payment
2.4. Duties and responsibilities
2.5. Use of computer
2.6. Frequency of tax review
3. What is the perception of the organizations management people about the level of
awareness in terms of:
3.1. Registration
3.2. Keeping the accounting books/records
3.3. Issuing official receipts and sales invoice
3.4. Filing of the Monthly Value-added Tax Declaration
3.5. Paying the Tax
3.6. Civil Penalties and Surcharges
4. What is the perception of the store management people about the level of
effectiveness in terms of:
4.1. Registration
4.2. Keeping the accounting books/records
4.3. Issuing official receipts and sales invoice
4.4. Filing of the Monthly Value-added Tax Declaration
4.5. Paying the Tax

4.6. Civil Penalties and Surcharges


5. Is there a significant difference in the respondents perception of the organizations
level of awareness when they are grouped according to their profile?
6. Is there a significant difference in the respondents perception of the organizations
level of effectiveness when they are grouped according to their profile
7. Is there a significant relationship in the respondents perception of the organizations
level of awareness and in the level of effectiveness of the organization?
Hypothesis
1. There is no significant difference in the respondents perception of the organizations
level of awareness when they are grouped according to their profile
2. There is no significant difference in the respondents perception of the organizations
level of effectiveness when they are grouped according to their profile
3. There is a significant relationship in the respondents perception of the organizations
level of awareness and in the level of effectiveness of the organization?
Scope and Limitation
This study will focus on the level of awareness and effectiveness of business tax
provisions of selected food stores in Teachers Village, Quezon City. The 3 business tax
which are VAT,POT and Excise tax are the taxes covered of the study. This was done to
have an understanding in whether the level of awareness in business taxes of the
respondents effectively applies to their respective business.
This study was composed of 42 respondents from the stores located in Teachers
Village who have sufficient knowledge regarding business taxes. There is, however, a
number of respondents who are staff of the stores. The questions were administered in
September 2016 and retrieved on the day of the survey.

Significance of the Study


This study is anticipated to contribute further information to serve the following
individuals and organizations.
Bureau of Internal Revenue. This study will help them evaluate the
effectiveness of their tax campaigns regarding business tax provisions and will help
improve adherence to said business taxes.
Students. This will deepen the understanding of the students concerning
business taxes. This study will assess their awareness and contribute as additional
knowledge.
Researchers. This study will enhance their knowledge as to business taxes and
whether these taxes are effectively adhered to by the selected food stores. This study
will also improve their view on taxpayers standpoint on business taxes.
Future Researchers. This study will serve as a future reference and tool to any
further relevant study mainly on awareness and effectiveness of business taxes in the
Philippines.
Definition of Terms

For better understanding and interpretation of this study, the following items are
operationally defined.
Age. It refers to the respondents span of life when the research was conducted.
Bureau of Internal Revenue (BIR). It is the governing body that implements
administrative provisions of National Internal Revenue Code of the Philippines also
known as Tax Code.
Business Taxes. It refers to impositions collected by the National Government
on onerous transfer of property, service, or rights in the regular or ordinary course of
business conducted within the Philippines.
Business Tax Awareness. It refers to the respondents level of knowledge
regarding registration, keeping of accounting record or books, issuance of sales
invoices and official receipts, filing of tax returns, payment of taxes and civil penalties
and surcharges.
Business Tax Effectiveness. It refers to the respondents business application
of business taxes according to their awareness regarding registration, keeping of
accounting record or books, issuance of sales invoices and official receipts filing of tax
returns, payment of taxes and civil penalties and surcharges.
Lead Variables. In this study, these are the measures that will assess the
awareness and effectiveness of the food stores,
Length of Service. It refers to the number of years the employee is employed in
the store or the number of years the owner runs the business.

Other Percentage Tax. It refers to a national business tax imposed on certain


persons or merchants, whether sellers of goods or sellers of services, specified under
sections 116 to 127 of the Tax Code.
Position of the Employee. It refers to the current employment situation of the
respondent.
Possible Solutions. It refers to the recommendations on how to solve problems
encountered as regards business tax awareness and effectiveness.
Problems Encountered. This refers to the issues faced regarding business tax
awareness and effectiveness.
Profile of the Respondents. It refers to the respondents' age, sex, civil status,
highest educational attainment, company position and length of service.
Profile of the Respondents Company. It refers to the companys form of
business organization, years of operation, capitalization and number of employees,
Respondents. It refers to the management people of the stores or businesses
who were asked to answer the questionnaires.
Sex. It refers to the classification of respondents according to male or female
when the research was conducted.
Teachers Village. It refers to Brgy. Teachers Village East, Maginhawa Corner
Masinsinan Street.

Value-added Tax. It refers to a national business tax imposed on certain persons


or merchants, whether a seller of goods, importer of goods or seller of services based
on their business sales/receipt transactions.

CHAPTER 2
REVIEW OF RELATED LITERATURE AND STUDIES
This chapter presents the general concepts, principles, theories and conclusions of
related literature and studies formulated by the experts of past generations. This
chapter includes local literature from locally published books and references, and local
studies taken from research works and studies related

to the subject matter. The

synthesis that dealt with theories, principles, concepts, approaches and techniques are
reviewed which contributed a lot towards the enrichment of knowledge, in-depth
understanding and insights of the researchers.
Foreign Literature
In Taiwan, business tax generally applies on the sale of goods and services
within its premises as well as the importation of goods in to the said country. Business
tax is imposed under two systems: Value Added Tax or VAT and Non- VAT (also known
as Gross Business Receipts Tax or GRBT). It is said to be applicable especially on
general industries. Non- VAT is applicable to financial institutions, special vendors on
beverages and food, small scale business enterprises. Business entities that sell goods

or services in Taiwan are required to pay business tax and issue government uniform
invoice to buyers at time of sale, delivery or receipt of payment, unless exempt from
doing so. Business tax is also levied on the consignees or holders of imported goods
and the buyers of services supplied by foreign companies with no fixed place of
business in Taiwan. An enterprise, whether or not it has sales must generally file a bimonthly VAT return with the collection authority by the 15th of each odd month for the
two preceding months. A company that qualifies for zero-rated VAT may apply to file
returns on a monthly basis. (Kuo,2015)

In addition to knowledge in business tax, it composes of VAT and other


percentage tax, excise tax if there is. Much has been written in Value Added Tax (VAT)
since its inception in tax administration worldwide. As per the conceptual meaning of
VAT, opinions differ. According to Bickely, regards VAT as a tax levied at each stage of
production on the first value added. In comparison to Oldman and Woods on the other
hand considers VAT as a multi-stage consumption tax levied on the difference between
a firms sales and the value of its purchased inputs used in producing goods. But the
most widely accepted but wooly definition is the one provided by the United Kingdom
Statement of Standard Accounting Practice (SSAP) Number 5, which states VAT is a
tax on the supply of goods and services, which is eventually borne by the final
consumer but collected at each stages of the production and distribution chain

Hence, from these definitions, it is evident that the classical VAT is a


consumption tax, its incidence is on the final consumers and it is a multi-state collection
tax. The original form of VAT started in Germany in 1919. In 1937, France introduced a
form of VAT known as production tax, which has helped replaced with producers
income-based tax in 1948 and consumption tax in 1954. The French VAT system
became a condition precedent of becoming a member of European Economic
Community (EEC) under the treaty of Rome in 1957. The European community
unanimously adopted VAT in 1967 following the reports of the Neumark and Jansen
Committees. Nigeria also adopted VAT in 1993. Many other countries have come to
replace sales tax with VAT for certain reasons. VAT is more comprehensive and well
equipped for taxing, more equipped to ensure voluntary compliance for its multi-stage
collection and credit mechanism through the use of invoices, it also provides a welldefined audit-trail for tax authorities and thus it is easier to integrate VAT with income
tax audit.

Furthermore, VAT has characteristics which include neutrality, equity, and


regressive nature. VAT is neutral to foreign trade; individual or household choices;
individual or household savings and consumption decisions; forms of business
ownership; mode of financing and the choice amongst inputs except where the supplies
are VAT exempt or zero-rated. The argument on the equity of VAT based on the
Hobbies theory of equity, which states that the people should pay tax based on what
they withdraw from societys resources, as measured by consumption, rather than what
they contribute to such resources, as measured by income according to Shenk. The

equity of VAT is therefore based on the fact that it is a consumption tax. The regressive
characteristics of VAT have been argued that it is only in a short run period; say a year
that VAT is regressive. However, on life cycle concept VAT burden tends to even out in
the long run. (Oladipupo,2013)
The strategic policy decisions in establishing VAT systems have attracted of tax
scholars such as Obadagbonyi. According to him some of these strategic policy
decisions range from the desirability of VAT adoption or otherwise, the form of VAT
system to adopt, coverage of VAT system, the government department to be
responsible for VAT administration. On the desirability of VAT, two groups exist. There
are those countries, which adopted it on a mandatory platform either because it was a
condition precedent to becoming a member of a regional grouping, like EEC or because
of the linkage with the colonial French master, as Cote dIvoire and Senegal. Then there
are other countries, which were merely persuaded to adopt VAT systems as a means of
enhancing their revenue-base by such international bodies as World Bank, International
Monetary Fund (IMF). Examples of which is Nigeria. VAT system has not in any way
been attractive in some other countries particularly those with strong pure federation. In
these countries, sales tax was doing very well and that each component state is
seriously guarding its revenue-base as well as its relative independence more jealously.
Examples of such countries include United States of America and Canada.
(Oladipupo,2013)
Three methods for calculating VAT have been identified. These are the credit
method (the Japanese model) and the addition and subtraction methods respectively.
The credit method is the most popular even though it does not define value added. The

attractions include easy policing and affordability of good audit trail due to the use of
invoicing.
Local Literature
A business is characterized as trade or commercial activities such as selling
goods or services to customers with a viewpoint of obtaining profit. The basic conditions
for an economic activity to be subject to business tax are (1) related to trade, profession
or business (2) occurred within the Philippines and (3) not exempted by law from
business tax. The regular business activity which are the sales of goods or services are
the basis of charging business tax. Exemptions to this rule of regularity is the sale of
services or goods by a non-resident foreign person. The major business taxes in the
Philippines are value added tax, percentage tax and excise tax.
The value-added tax is a form of consumption tax imposed on each (1) sale,
barter, exchange or lease of goods, properties or services in the course of trade or
business in the Philippines and (2) Importation of goods into the Philippines; whether or
not in the course of trade or business (Valencia & Roxas, 2016). It is an indirect tax
whereas the seller is statutorily liable for payment but may be shifted on to the buyer,
transferee or lessee of goods, properties or services. In the case of importation, the
importer is the one liable for payment of VAT.
There are three classifications of merchants organizations as to VAT liability
namely: (1)Non VAT-registered (2) VAT-registered and (3) VAT registrable. Non VATregistered person refers to a person who is not liable to the VAT and did not register as
such. On the other hand, a VAT-registered person refers to a person who is liable to the

VAT and did register as such. Lastly, a VAT- registrable person refers to a person who is
liable to VAT but did not register as such. Both VAT-registered persons and VAT
registrable persons are subject to the 12% VAT rate. (Litonjua & Litonjua, 2013)
The criteria of knowing when a person/business is subject to VAT are as follows:
(1) transactions are taxable (2) actual/expected yearly gross sales or gross receipts
exceeds P 1,919,500 (3) registered as VAT-registered person or VAT-registrable and (4)
transactions are made in the course of trade or business.
There are two methods in computing VAT namely: Tax Exclusive Basis and Tax
Inclusive Basis. Under the former, the 12% vat rate is applied on the basis of gross
sales/receipts which still excludes the VAT. However, in the tax inclusive basis, the
12/112 VAT factor is applied on the invoice price/receipts which includes the VAT.
In the standpoint of a seller, the tax added to the goods or services sold that is
collectible from the buyer is called Output VAT which is to be treated as current liability
of a VAT-registered seller. A non-VAT seller is not permitted to collect output VAT from
the buyer. While, on the view of the buyer, a tax added on the purchase price of goods
or services payable to the VAT-registered seller is called input VAT which shall be
recorded and treated by the VAT-registered buyer as a current asset. The taxpayerseller that is VAT registered is liable only up to the amount excess of his output VAT
over his input VAT.
Other Percentage Tax (OPT) also called Non-VAT is a business tax imposed
with the varying rates (from 0% to 30%) on business transactions specifically identified

by law (Litonjua & Litonjua, 2013). A Non-VAT business is a business with an annual
gross sales or gross receipts of P1,919,500 and below is subject to 3% OPT.
OPT is imposed on (1) sale of goods or services by non-VAT persons whose
annual total sales or gross receipts do not exceed P1,919,500 (2) gross receipts of a
Non-VAT TV/radio franchise grantees whose annual gross receipts do not exceed
P10,000,000 and (3) specifically mentioned under OPT in accordance with Section 117
to 127 of NIRC which are (1) Domestic Common Carriers and Keepers of Garage (2)
International Common Carriers (3) Franchise Grantees (4) Overseas Communicators
from the Philippines (5) Banks and Non-Bank Financial Intermediaries (6) Other NonBank Financial Intermediaries (7) Life Insurance Companies (8) Agents of Foreign
Insurance Companies (9) Amusement Places (10) Winners in Horse Races, Jai-Alai and
(11) Sellers/Transferors of Shares of Stock.
Excise tax is generally imposed on harmful and non-essential goods
manufactured or produced in the Philippines for domestic sale, consumption or for any
other disposition including imported goods (Valencia & Roxas, 2016). In general, the
excise tax return shall be filed and the corresponding excise tax due shall be paid by the
producer, manufacturer of local goods or by the importer of foreign goods before
removal of the manufactured/produced or imported goods from the place of
production/manufacturing or from the custody of the Bureau of Customs as the case
maybe. (Litonjua & Litonjua, 2016)
The value added tax and other percentage tax are mutually exclusive; which
means that a product or service cannot be subject to both taxes at the same time
whereas the excise tax shall be in addition to the value added tax (in the case of a VAT

registered person) or to the percentage tax (in the case of non-vat registered person)
imposed upon its sales.
In connection with the effectiveness of the collection of business taxes, a Filipino
journalist named Chito Chavez of the Manila Bulletin wrote that the business tax
collection in Quezon City increased during the first 10 months of 2012 by about 12.22%
compared to the same period last year. In 2011, the Bureau of Local Government
Finance of the Department of Finance, has named Quezon City as the best individual
revenue performer among the 17 local government units comprising the NCR. The
registered businesses in Quezon City has increased from 60,154 in 2011 to 67,096 in
2015. (Quezon City Information Technology Development Office 2012)
Foreign Studies
The spread of value-added tax (VAT) in developing countries has been dramatic
over the decade of 1990s. Adopted by more than 130 countries, including many of the
poorest, VAT has been, and remains, the key of tax reform in many developing
countries. While adopting VAT, there are arguments for and against uniform general VAT
system. A uniform and general VAT on all commodities is considered to be efficient and
less distortionary. On the other hand, from the distributional perspective many goods
especially food are exempted from VAT net as low income people spend a high share of
income on food. This paper analyzes income distribution and welfare impact of VAT
reform for Bangladesh with taking the special consideration into local and super market
food sectors.

Being a developing country with low tax-GDP ratio, reforming the existing tax
structure is essential for Bangladesh. The challenge is how to redesign the VAT system
without deteriorating the income distribution. We applied the CGE model by Bohlin
(2010) to analyze effects from VAT reforms where all the simulations were made to keep
the revenue unchanged.
Comparing the equivalent variations we see that a uniform and general VAT on
all the goods and services is welfare improving. However, it is more about an
implementation issue. For a low income country with a large informal sector, VAT
avoidance is existent. For the equity concern food and agricultural commodities are
exempted from VAT in Bangladesh. Moreover, there is a threshold for VAT compliance.
Therefore, VAT broadening by exempting the 17 agriculture and local market food
sector are justified in the presence of an informal economy with tax avoidance. The
imposed VAT rate is much lower than the present official VAT rate. (Jrgen Levin and
Yeasmin Sayeed, 2014)

Value added tax (VAT) is a key part of the fiscal revenue of many countries. Yet
this broad-based tax on consumer spending exempts financial services. This seems
puzzling to many, particularly given the significance of that sector and the size of its
value-added in today's world economy. The fact that the European Commission is
currently reviewing the tax treatment of financial activities in the European Union (EU)
underscores

the

importance

of

addressing

the

issue.

Conventional wisdom holds that taxing financial services under a transactionbased VAT system entails difficulties that render it impossible to tax the services. The
thesis investigates where the difficulties lie. The research is undertaken using
benchmarks, namely the character of European VAT as an indirect tax on consumption
expenditure and the specific features of financial activities, namely that they turn around
money and the functions of money. The various key VAT concepts (e.g., taxable person,
activities, namely that they turn around money and the functions of money.) The various
key VAT concepts (e.g., taxable person, taxable transactions, and taxable amount) are
researched in order to establish whether the inclusion of financial activities in the
European VAT system entail specific difficulties both from a practical, legal point of view
and from a theoretical point of view (in the light of the benchmarks). The thesis contains
an extensive investigation of the law inter alia as regards the scope of the exemption for
financial services and the scope of the European VAT system. It is found that,
particularly with regard to defining the scope of European VAT, what constitutes a
taxable transaction, the taxable amount and calculating a deductible proportion, clear
practical and theoretical difficulties exists.
Finally, the thesis describes and evaluates alternative treatments to an
exemption of financial services such as using both additive and cash-flow methods. The
current review of financial services is also discussed. It is found that no clear best
practice can be established. However, based on both theoretical and practical
considerations, a preferred treatment is presented (Henkow,2007).

Ethical tax awareness of a taxpayer refers to the satisfaction and pride for
fulfilling tax obligation when it is due. It also refers that tax is likely to a duty of every
citizen therefore paying the tax is a prior expenditure.
It is such a good signal for government that potential taxpayers, in average, have
been aware of tax obligation. The government must accordingly take into account to
keep the awareness become compliance in the future when potential taxpayers become
real taxpayers.
Tax knowledge also affects the taxpayers attitude towards the accuracy of the
tax return (Eriksen and Fallan, 1996; Kirchler et. al., 2008)
No study has been done to investigate which parts of tax knowledge have the
greatest effect on attitude toward taxation. Experiments with different types of courses
could provide new understanding. (Eriksen and Fallan, 1996: 399).
The tax administrators should not only focus on their convenience but must also
consider taxpayers convenience particularly in terms of tax regulations, filings,
assessments, payments, administration and costs of administering the tax system
(Sandford, 1993).
Specific tax education programmes for taxpayers have been implemented in
most countries including the US (including via online education22), Canada and the UK.
Tax education can constitute any informal or formal programme organised by the tax
authority or independent agencies by which to facilitate taxpayers in completing tax
returns correctly and also to cultivate awareness of their responsibilities in respect of the
tax system (Eriksen and Fallan, 1996; IRB Annual Report, 2006; McKerchar, 2007).

In addition to tax education, knowledge about tax laws also plays a major role in
determining taxpayers compliance behaviour (Eriksen and Fallan, 1996). Therefore a
step ahead, for example continuous education programmes and effective monitoring
mechanisms must be taken into account by tax authorities to ascertain that taxpayers
43 have a good and reasonable knowledge and understanding of tax matters. However,
the awareness and attitude of the taxpayer himself is more important since the
effectiveness of tax education depends on the readiness, acceptance and honesty of
taxpayers.
The study provides further evidence that tax knowledge is important and
significantly affects tax compliance (in a positive direction) meaning, developing tax
knowledge further would probably help to increase tax compliance. (Palil,2010)
Local Studies
The conclusion the researchers arrived at, is that the industry will gain more if the
corporate tax is reduced followed by the abortion of the documentary stamp tax.
However, the government may not lower the corporate tax because of the VAT tax.
Thus, making the industry earn more withour lowering the corporate income tax.
(Erestain, 2006)
In a study conducted by undergraduate students of Dela Salle University
focusing on the tax system of Philippines vis a vis India, they said that India is a bit
better off than the Philippines because the bracketing they used in terms of income tax
is clearer and more understandable compared to the bracketing system of the income
tax of the Philippines. The Value added tax of India is based on a multi-point destination

system and is imposed on every stage of the production of the good. However, basic
necessities and goods of local importance have been exempted to the VAT and
precious metals such as gold, silver and precious stones have a tax rate of 1%. The tax
collection of India is more efficient since their tax is straightforward and clearer
compared to the Philippines. The tax system of the Philippines, is not so effective, unlike
in the India because there are so many things to pay, the taxpayer will pay a certain
amount and a percentage in excess of the lower amount. (Camarao et al , 2014)
According to a study conducted in Divisoria, where store owners continue to
comply and implement tax provison. The store managements know very well that when
they do not comply with the tax provision, they will receive penalties and worst is that
the BIR will order the closure of their stores. The study recommends, seminars, forums
and symposiums will help increase the awareness of taxpayers about the tax
provisions. (Barberan, 2015).
According to a study conducted in Cainta, Rizal, value-added tax returns are the
most prominent type of tax returns filed by the management people. VAT is basically a
multiple stage tax. According to which, a person has to pay tax at every stage of
production and distribution. Hence, tax would be charged at every step of value
addition. Since, the tax is charged on commodities purchased for consumption, it is
therefore a consumption tax. From a buyers view point, it is a tax charged on purchase
price while from a sellers perspective; it is levied on value addition made to any
product, service or material at a particular stage in the supply chain. The difference
between the two amounts is paid to the government and the remainder is kept by the

producer to makeup for the changes they have incurred in purchasing inputs
(Fernandez et al, 2014).
Synthesis

This review of related literature and studies serves as a benchmark for the
researches to have better insight and synopsis about the concept of the study. The
gathered information encouraged the researchers to further conduct about the issue.
Deeper understanding of the subject of this thesis may not be possible without the aid of
cited significant materials. Consequently, the related literature and studies just reviewed
provided guides and directions necessary for the researchers to meet the aimed
objectives and other useful thoughts which will farther enhanced the foundation of the
researchers ideas with regards to the chosen topic.
Our model thesis is the study conducted Divisoria, Manila entitled Measuring
the Level of Compliance with Value-Added Tax Provisions on Selected Stores in
Divisoria aimed to determine the degree of Value-Added Tax (VAT) compliance of
selected stores in Divisoria. by H. Barbaran,K. Badillo, et. al, where value-added tax
returns are the most prominent type of tax returns filed by the management people.
(Barbaran, Badillo et al, 2015).
The researchers had also come to identify similarity

to the study

conducted by Sandord,(1993) which The tax administrators should not only focus on
their convenience but must also consider taxpayers convenience particularly in terms of
tax regulations, filings, assessments, payments, administration and costs of
administering the tax system.

All of the reviewed materials give way for the researchers to gain a better
understanding of the subject matter. The studies were used to put a clearer image of the
problem and better address the problem so stated. The results of the previous studies
obtained have been useful to evaluate the results of this study.

Chapter 3
RESEARCH METHODOLOGY
This chapter discusses the design and procedures undertaken in conducting the
study. It presented the research method used, respondents of the study, population,
sample size, sampling technique, instrument used, data gathering procedures and
statistical treatment of data.
Research methods used
The researchers made use of the descriptive research method which is designed
to obtain information concerning the current status of the phenomena to describe what
is existing with respect to the variables or conditions in the chosen field of study. This
method allows the researchers to interpret the theoretical meaning of the findings and
hypothesis development for further studies.

Descriptive research, sometimes known as non-experimental or correlational research,


deals with the relationships between variables, the testing of hypotheses, and the
development of generalizations, principles and theories that have universal validity. The
expectation is that if variable A is systematically associated with the variable B,
prediction of future phenomena may be possible and the results may suggest additional
and competing hypotheses to test. (Singh, Nath, 2007).
Descriptive studies are used to describe various aspects of the phenomenon.
Moreover, descriptive research is used to describe characteristics and/or behaviour of
the sample population. In this study, the researchers were determined to emphasize on
information about variables rather than individuals.
As

used

in

this

research,

data

obtained

and

treated

are

data

on

respondentsprofile such as age, gender, highest educational attainment, position in the


company, number of years of training, and tenure of service in the company.
Population, Sample size and Sampling Technique
According to Parahoo (1997), population is defined as the total number of units
from which data can be collected, such as individuals, artifacts, events or organizations.
Burns and Grove (2003) describe population as all the elements that meet the criteria
for inclusion in a study. The study population consisted of all food stores in the premises
of UP Teachers Village East. The barangay chairman of UP Teachers Village gave the
list of stores to the researchers.

Name of Business

1. M 101 FOOD HUB


2. MAMAYS IHAW-IHAW
3. JKAS FOOD SERVICES
4. MOONLEAF HOLDING INCORPORATED
5. THE MOONLEAF TEASHOP
6. MARCIANAS PALABOK SUPREME AND PUTO PANDAN
7. CJSS GRIDDLE STEAK AND CHICKEN HOUSE
8. 1 THEOS COFFEE SHOP
9. PATRICK ERWIN WAFFLE STATION
10. ROJO YUM FOODS CORP.
11. KUAIZI RESTAURANT
12. MJDA GRILL
13. GEM KINGS CORPORATION
14. PROVINCIANO
15. FAT COUSINS DINER
16. AVTOL PARES AND GRILL
17. AILM FOOD CART
18. DORISSOMO FOODS
19. RBYS STEAL AND SHAKE HOUSE
20. BALIWAG LECHON MANOK INC.
21. BOBOS PIZZERIA
22. BAKERS TABLE BAKESHOP
23. GO-EN THE JAPANESE RAMEN RESTAURANT
Table 3.1 Population of the food stores in UP Teachers Village
Some of the stores listed are already closed because of various reasons, and
there are new food stores along the barangay. The new stores are included in the
population.
According to Explorable.com (2009) the sample size of a statistical sample is the
number of observations that constitute it and determining the sample size to be selected
is an important step in any research study. Getting sample size is done because it is
impossible to test every single individual in the population. It is also done to save time,
money and effort while conducting the research.
In this study the total number of different categories of stores that were listed was
47. Slovene formula was used to get the sample size.

n=

N
2
1+ N e

0.05
1+(47)( 2)
47
n=
n=42

The sample sizes of 42 food stores were the total of subjects who were willing to
participate in the research during the period of data collection.
According to United States Bureau of the Census (1998), a sampling technique is
the name or other identification of the specific process by which the entities of the
sample have been selected. According to Royal Geographical Society (2010), in reality
there is simply not enough; time, energy, money, labor/man power, equipment, access
to suitable sites to measure every single item or site within the parent population or
whole sampling frame. Therefore an appropriate sampling strategy is adopted to obtain
a representative, and statistically valid sample of the whole.
There are many sampling techniques that can be used. There are 3 main types
of sampling techniques, namely: Random, Random, And Systematic and Stratified
sampling technique. The researcher used Random Sampling as the technique to
achieve the required sample size. The researchers chose this technique because it is
the least biased of all sampling techniques, there is no subjectivity - each member of the
total population has an equal chance of being selected.

Description of Respondents
The respondents of the study are 42 management people from selected stores
registered at Barangay UP Village, Quezon City through the coordination of Barangay
Chairman Lolita DL. Singson. There were 19 owners, 12 managers, 6 supervisors and 5
staff that participated in the survey.
Research Instrument
In this study, survey questionnaires are used as the principal instrument in data
gathering. Some of the questions are adopted from other various theses regarding tax
compliance. The contents of the questionnaire are patterned from the questionnaire
developed in a study entitled Measuring the Level of Compliance with Value-Added Tax
Provisions of Selected Stores in Divisoria by Barberan, Hanah Faye P. et al. By all
means, the researchers designed the questionnaires in a proper form to accommodate
sufficient and relevant information required from the respondents.
The questionnaire is composed of 5 parts, namely: profile of the respondents, the
profile of the respondents, the profile of the respondents company, Profile of Business
Tax Practices, level of awareness and level of effectiveness. Likert scale is used to
modify the answers of the respondents considering five (5) options with the
corresponding scale. For level of awareness, the 5 options are (5) Hightly Aware; (4)
Aware; (3) Undecided; (2) Not aware; 1 Strongly not aware. For level of effectiveness,
the 5 options are (5) Hightly Effective; (4) Effective; (3) Undecided; (2) Not effective; (1)
Strongly not effective. Respondents are requested to check the space provided for each
option.

Data Gathering Procedures


Upon approval of the topic, the researchers started contacting different malls
such as St. Francis Square Mall across Megamall, Green Hills Mall along San Juan, but
unfortunately the said malls declined the request of the researcher to conduct a survey
within their premises. The researchers decided to locate their subject location area at
Brgy. Teachers Village along Quezon City. The researchers began contacting the
Barangay office staff to acquire their permit to conduct a survey within Brgy. Teachers
Village. The researchers also began collecting information from the Internet and
libraries. The researchers collected data and information from different libraries within
Manila and Quezon City. Different books, article publication, periodicals and other
publications are collected. With the information gathered the researchers began
constructing their questionnaires. The researchers performed the data gathering
procedures through the use of survey questionnaires to reflect all the important aspects
of the study.
After the questionnaire for the respondents have been finalized, the survey is
immediately conducted. The researchers conducted a survey for one (1) day to be able
to gather all necessary information that they needed. They encountered a lot of hard
time doing the survey since most of the manager or owners were not present in their
stores who were needed to be the respondent for having the knowledge on Taxation in
their businesses. Some stores are busy serving the customers that were arriving at that
moment. Despite all of that, the researchers were still able to complete all the needed
details for the survey. Then all the results were tallied and tabulated according to the
frequency of the items checked by the respondents. Results were interpreted using the

selected statistical tools. The results of the tabulation were used in the data gathering
improved by the research team in order for the researchers to arrive at the interpretation
of the study.
Statistical Treatment of Data
The data gathered in this study pertaining to the employees and owners of the
selected stalls within the vicinity of the Brgy. Teachers Village are grouped, tabled and
carefully organized to be used in the presentation and interpretation of the results.
1. Frequency and Percentage Distribution
The percentage and frequency distributions are used to classify the respondents
according to personal variables such as age, gender, civil status, highest educational
attainment, position in the company and number of years in position; and their
perspective according to business variables such as form of business, years of
existence. The frequency also presented the actual response of the respondents to a
specific question or item in the questionnaire.
On the other hand, the percentage of that item is composed by dividing it with the
sample total number of respondents who participated in the survey. The formula used in
the application of this technique is:

% = (f/n) x 100
Where:
% = percentage

f = frequency
n = number of cases or total sample
2. Weighted Mean
Another Statistical technique used by the researchers is the weighted mean. It is
used to determine the average responses of the different options provided in the various
parts of the survey questionnaire used. The method is used in conjunction with the
Likert Scale. It is solved by the formula

Where:
x= fx/ n
x= weighted mean
fx= the sum of all the products of f and x
f being the frequency of each weight
and x as the weight of each operation
n= total number of respondents
3. Analysis of Variance
A common statistical technique used to test a hypothesis concerning the means of
several independent samples. The one-way ANOVA or one-way F-test is used whether

the null hypothesis is rejected or accepted. In one-way ANOVA, mean squares of


between groups and within groups are necessary to compute the F-ratio. The formulas
for solving mean squares are:
Formula:

F=

MS s
MS w

F= F compute
MSs = mean squares of between groups
MSw = mean squares of the within-group
4. Pearson Correlation Coeffcient
Another Statistical Method is the Pearson correlation coefficient that is

very

helpful statistical formula that measures the strength between variables and
relationships. Under the field of Statustics, Pearson correlation coefficient formula is
often referred to as the Pearson R test. When conducting a statistical test between two
variables, it is recommended to conduct a Pearson correlation coefficient value to
determine just how strong that relationship is between those two variables. It solve by
the formula
Where:

x
Y

N 2
Y

xy
N
r =

= Number of pairs of scored

xy

= Sum of the product of paired scores

= Sum of x scores

= Sum of y scores

x2

= Sum of squared x scores

y2

= Sum of squared y scores

Chapter 4
PRESENTATION, ANALYSIS AND INTERPETATION OF DATA
This chapter shows and discloses the presentation of organized data into logical,
sequential and meaningful categories and classifications to make them amenable to
study and interpretation. The tabulated data were analyzed in order to answer the
specific questions in the statement of the problem. Analytical tables were also presented
according to the sequence of the specific questions.

1. Profile of the store


1.1. Personnel Involved in tax practices
Table 2
Frequency and Percentage Distribution of the
Respondents in terms of Age
Age
20-25 years old
26-30 years old
31-35 years old
36-40 years old
41 years old and above
Total

Frequency
13
20
6
2
1
42

Percentage (%)
30.95
47.62
14.29
4.76
2.38
100.00

This table shows that out of 42 respondents, 20 or 47.62% are from the range 26-30
years old; 13 or 30.95% are from the range of 20-25 years old; 6 or 14.29% are from the
range of 31-35 years old; 2 or 4.76% are from the range of 36-40 years old; 1 or 2.38%
are from the range of 41 years old and above.

Table 3
Frequency and Percentage Distribution of the
Respondents in terms of Sex
Sex
Male
Female
Total

Frequency
18
24
42

Percentage (%)
42.86
57.14
100.00

This table shows that out of 42 respondents, 24 or 57.14% are female and
18 or 42.86% are male.

Table 4
Frequency and Percentage Distribution of the
Respondents in terms of Position of the Employee
Position of the Employee
Owner
Manager
Supervisor
Staff
Total

Frequency
19
12
6
5
42

Percentage (%)
45.24
28.57
14.29
11.90
100.00

This table shows that out of 42 respondents, 19 or 45.24% are owner; 12


or 28.57% are manager; 6 or 14.29% are supervisor; 5 or 11.90% are staff.

Table 5
Frequency and Percentage Distribution of the
Respondents in terms of Length of Service
Length of Service
1-5 years
6-10 years
Total

Frequency
41
1
42

Percentage (%)
97.62
2.38
100.00

This table shows that out of 42 respondents, 41 or 97.62% serve from the
range of 1-5 years and only 1 or 2.38% serve from the range of 6-10 years

Table 6
Frequency and Percentage Distribution of the Respondents
in terms of their Highest Educational Attainment
Respondents in terms of their
Highest Educational Attainment
High School Undergraduate
Masters Degree
High School Graduate
Vocational
College Undergraduate
College Graduate
Total

Frequency

Percentage (%)

2
1
1
3
3
32
42

4.76
2.38
2.38
7.14
7.14
76.19
100.00

This table shows that out of 42 respondents, 32 or 76.19% are college


graduate; 3 or 7.14% are college undergraduate and vocational; 2 or 4.76% are high
school undergraduate and 1 or 2.38 are high school graduate and have masters
degree.

Table 7
Frequency and Percentage Distribution of the Respondents
in terms of their Highest Educational Attainment
Respondents in terms of their
Highest Educational Attainment
High School Undergraduate
Masters Degree
High School Graduate
Vocational
College Undergraduate
College Graduate
Total

Frequency

Percentage (%)

2
1
1
3
3
32
42

4.76
2.38
2.38
7.14
7.14
76.19
100.00

This table shows that out of 42 respondents, 32 or 76.19% are college


graduate; 3 or 7.14% are college undergraduate and vocational; 2 or 4.76% are high

school undergraduate and 1 or 2.38 are high school graduate and have masters
degree.

1.2. Profile of the Company


Table 8
Frequency and Percentage Distribution of the
Respondents in terms of Form of Business
Forms of business
Sole Proprietorship
Partnership
Corporation
Total

Frequency
24
16
2
42

Percentage (%)
57.14
38.10
4.76
100.00

This table shows that out of 42 respondents, 24 or 57.14% are sole proprietorship; 16 or
38.10% are partnership; 2 or 4.76% are corporation.

Table 9
Frequency and Percentage Distribution of the
Respondents in terms of Years of Operation
Years of Operation
5 years and below
6-10 years
Total

Frequency
40
2
42

Percentage (%)
95.24
4.76
100.00

This table shows that out of 42 respondents, 40 or 95.24% operates from


the range of 5 years and below and 2 or 4.76% operates from the range of 6-10 years.

Table 10
Frequency and Percentage Distribution of the
Respondents in terms of Capitalization
Capitalization
Loan
Investment from owners
Partly loan and partly
investment from owners
Others
Total

Frequency
2
32

Percentage (%)
4.76
76.19

14.29

2
42

4.76
100.00

This table shows that out of 42 respondents, 32 or 76.19% uses


investment from owners; 6 or 14.29% partly loans and partly invests from owners; 2 or
4.76% uses loan; and another 2 or 4.76% uses other capitalization.

Table 11
Frequency and Percentage Distribution of the
Respondents in terms of Number of Employees
Number of Employees
5 employees and below
6-10 employees
10 employees and above
Total

Frequency
12
21
9
42

Percentage (%)
28.57
50.00
21.43
100.00

This table shows that out of 42 respondents, 21 or 50.00% have a number


of employees ranging from 6-10; 12 or 28.57% have 5 employees and below; 9 or
21.43% have a number of employees ranging from 10 and above.

2. Profile of Business Tax practices

Table 12
Frequency and Percentage Distribution of the
Respondents in terms of Taxes Filed and Paid
Taxes Filed and Paid
VAT
Other Percentage Tax
Total

Frequency
39
3
42

Percentage (%)
92.86
7.14
100.00

This table shows that out of 42 respondents, 39 or 92.86% filed and


paid VAT and 3 or 7.14% filed and paid Other Percentage Tax.

Table 13
Distribution of the Stores According to Frequency
of Tax Filing and Paying
Frequency of tax filing
and payment
Monthly
Quarterly
Annually
Total

Frequency

Percentage (%)

30
7
5
42

71.43
16.67
11.90
100.00

The table indicates that among the 42 stores, 30 or 71.43 % are filing and paying
monthly; 7 or 16.67% are filing and paying quarterly; and the 5 stores or 11.90% are
filing and paying annually. This shows that the majority of the stores chose to file and
pay their taxes monthly.

Table 14
Distribution of the Stores According
to Frequency of Tax Review
Frequency of tax review
Monthly
Quarterly
Semiannually
Annually
Total

Frequency
31
6
1
4
42

Percentage (%)
73.81
14.29
2.38
9.52
100.00

The result shows that among the 42 stores, 31 or 73.81% review their taxes
monthly; 6 or 14.29% of them review their taxes quarterly; 1 store or 2.38% review their
taxes semi-annually; and 4 or 9.52% are annually. This indicates that most of the stores
review their taxes monthly.
Table 15
Distribution of the Stores According to Preparing of Financial Statements
Preparing of financial
statement
Owner
Manager
Accountant
External Accountant
Total

Frequency

Percentage (%)

13
3
19
7
42

30.95
7.14
45.24
16.67
100.00

It shows that in preparing the financial statements among the 42 stores, 13


stores or 30.95% are being prepared by the owner; 3 or 7.14% are prepared by the
Manager; 19 or 45.24% of them are prepared by an Accountant; and the remaining 7 or
16.67% are prepared by the external Accountant. This indicates that the financial
statement of the stores is mostly prepared by the internal accountant.

Table 16
Distribution of the Stores According to Tax Filing
Tax Filing
Owner
Manager
Accountant
External Accountant
Total

Frequency
12
3
25
2
42

Percentage (%)
28.57
7.14
59.52
4.76
100.00

The table indicates that in tax filing among the 42 stores, 12 or 28.57% are being
filed by the owner; 3 or 7.14% are being filed by the Manager; 25 or 59.52% are filed by
an Accountant; 2 or 4.76% are filed by an External Accountant. The result shows that
the taxes of the stores are mostly filed by their internal accountant
Table 17
Distribution of the Stores According to Tax Payment
Tax Payment
Owner
Manager
Accountant
External Accountant
Total

Frequency
14
3
23
2
42

Percentage (%)
33.33
7.14
54.76
4.76
100.00

The table shows that in payment of taxes, out of 42 stores, 14 or 33.33% are
paid by the owner; 3 or 7.14% stores are paid by the Manager; 23 or 54.76% are being
paid by an Accountant; 2 or 4.76% are paid by an External Accountant. This indicates
that taxes are being paid mostly by the Internal Accountants.

Table 18
Distribution of the Stores According to Tax Review
Tax Review
Owner
Manager
Accountant
External Accountant
Total

Frequency
14
2
24
2
42

Percentage (%)
33.33
4.76
57.14
4.76
100.00

The table shows that in reviewing their taxes, among the 42 stores, 14 stores or
33.33% are being reviewed by the owner; 2 or 4.76% are reviewed by the Manager; 24
or 57.14% of them are reviewed by their Accountant; 2 or 4.76% are reviewed by the
External Accountant. This shows that the taxes of the stores are mostly reviewed by
their internal accountant.
Table 19
Distribution of the Stores According to Use of Computer
in Preparing Financial Statement
Use of Computer Preparing of Financial
Statement
Yes
No
Total

Frequency

Percentage (%)

32
10
42

76.19
23.81
100.00

The table shows that among the 42 stores, 32 or 76.19% uses computer in
preparing the financial statement; 10 stores or 23.81% do not use computer in financial
statement preparation. This indicates that majority of the stores uses computer in
financial statement preparation.

Table 20
Distribution of the Stores According to Use of Computer in Tax Filing
Use of Computer - Tax
Filing
Yes
No
Total

Frequency

Percentage (%)

36
6
42

85.71
14.29
100.00

The table indicates that out of the 42 stores, 36 stores or 85.71% use computer
in filing their tax; 6 or 14.29% do not use computer in tax filing. The result shows that
most of the stores use computer in filing their taxes.

Table 21
Distribution of the Stores According to Use of Computer in Tax Payment
Use of Computer - Tax
Payment
Yes
No
Total

Frequency

Percentage (%)

32
10
42

76.19
23.81
100.00

The table shows that among the 42 stores, 32 or 76.19% of them uses computer
in paying their tax; 10 stores or 23.81% do not use computer in tax payment. This
indicates the most stores uses computer in paying their taxes.

Table 22
Distribution of the Stores According to Use of Computer in Tax Review
Use of Computer - Tax
Review
Yes
No
Total

Frequency

Percentage (%)

34
8
42

80.95
19.05
100.00

The table shows that among the 42 stores, 34 or 80.95% uses computer in reviewing
their taxes; 8 stores or 19.05% do not use computer during tax review. This indicates
that majority of the stores uses computer during tax review.

3. Level of awareness
3.1. Registration

3.1.

Keeping the accounting books/records

Table 24
Level of Awareness of the Organization's Management People on Business
Tax Management in the Aspects of Keeping the Accounting Records
Verbal
Weighte Interpretati
Issuance of Sales Invoices and Official Receipts
d Mean on
The business must issue duly registered receipt or invoice for
Highly
every sale of goods or service rendered
4.71 Aware
The businesss invoice must always show the quantity,
description of merchandisor nature of service and the name of
Highly
the customer
4.71 Aware
The businesss invoice and official receipt must always
Highly
prepared in duplicate or more.
4.69 Aware
The business Tax Identification Number, name of owner,
business address, contact number and the business name
must always be indicated in any invoices, statements or
Highly
documents filed by the company
4.69 Aware
Highly
Overall Weighted Mean
4.70 Aware

This indicates that the respondents are highly aware at an average of 4.71 that
the must issue duly registered receipt or invoice for every sale of goods or service
rendered. At an average of 4.71, the respondents are highly aware that the
businesss invoice must always show the quantity, description of merchandisor
nature of service and the name of the customer. The table also indicates that an
average of 4.69 the respondents are highly aware that the businesss invoice and
official receipt must always prepared in duplicate or more. The respondents are
highly aware that the business tax Identification Number, name of owner, business
address, contact number and the business name must always be indicated in any
invoices, statements or documents filed by the company at an average of 4.69. The
overall weighted mean of 4.7 indicates that the respondents are highly aware as to
issuance of sales invoices and official receipts.
3.2.

Issuing official receipts and sales invoice

Table 25
Level of Awareness of the Organization's Management People on Business
Tax Management in the Aspects of Issuing Receipts and Sales Invoices

Issuance of Sales Invoices and Official Receipts


The business must issue duly registered receipt or invoice for
every sale of goods or service rendered
The businesss invoice must always show the quantity,
description of merchandisor nature of service and the name of
the customer
The businesss invoice and official receipt must always
prepared in duplicate or more.
The business Tax Identification Number, name of owner,
business address, contact number and the business name
must always be indicated in any invoices, statements or
documents filed by the company
Overall Weighted Mean

Verbal
Weighte Interpretati
d Mean on
Highly
4.71 Aware
Highly
4.71 Aware
Highly
4.69 Aware
Highly
4.69 Aware
4.70 Highly

Aware
This indicates that the respondents are highly aware at an average of 4.71 that
the must issue duly registered receipt or invoice for every sale of goods or service
rendered. At an average of 4.71, the respondents are highly aware that the
businesss invoice must always show the quantity, description of merchandisor
nature of service and the name of the customer. The table also indicates that an
average of 4.69 the respondents are highly aware that the businesss invoice and
official receipt must always prepared in duplicate or more. The respondents are
highly aware that the business tax Identification Number, name of owner, business
address, contact number and the business name must always be indicated in any
invoices, statements or documents filed by the company at an average of 4.69. The
overall weighted mean of 4.7 indicates that the respondents are highly aware as to
issuance of sales invoices and official receipts.

3.3.

Filing of the Monthly Value-added Tax Declaration

Table 26
Level of Awareness of the Organization's Management People on Business
Tax Management in the Aspects of Filing Tax Return

Filing of Tax Returns

Weighted
Mean

The business must file all the applicable tax returns


The business must observe the implemented due date of filing
by the BIR
The business must observe the proper place of filing the
applicable tax returns
The business must file a monthly and quarterly declaration of
the tax return
The tax returns must be filed with to the authorized collecting
agent

4.67

Overall Weighted Mean

4.71

4.71
4.69
4.76
4.71

Verbal
Interpretatio
n
Highly
Aware
Highly
Aware
Highly
Aware
Highly
Aware
Highly
Aware
Highly
Aware

This indicates that the respondents are highly aware at an average of 4.67 that
the business must file all the applicable tax returns. At an average of 4.71, the
respondents are highly aware that the business must observe the implemented due
date of filing by the BIR. The table also indicates that at an average of 4.69, the
respondents are highly aware that the business must observe the proper place of filing
the applicable tax returns. The respondents are highly aware that the business must file
a monthly and quarterly declaration of the tax return at an average of 4.76. An average
of 4.71 of the respondents are highly aware that the returns must be filed with to the
authorized collecting agent. The overall weighted mean of 4.71 indicates that the
respondents are highly aware as to filing of tax returns.

3.4.

Paying the Tax

Table 27
Level of Awareness of the Organization's Management People on Business
Tax Management in the Aspects of Paying the Tax

Payment of Taxes
The business must always pay its tax liability upon the date
of filing of the tax return
The amount of the tax liability explicitly written in the tax
return must rarely in disagreement with the assessed
amount of the BIR Commissioner
The business as a taxpayer must be keen to changes in BIR
regulations
It must be the companys accountant who calculates and
disseminates tax information regarding the companys tax
liability
The business must pay monthly and quarterly tax return
Overall Weighted Mean

Verbal
Weighte Interpretatio
d Mean
n
Highly
4.71 Aware
Highly
4.76 Aware
Highly
4.71 Aware
Highly
4.64 Aware
Highly
4.69 Aware
Highly
4.70 Aware

This indicates that the respondents are highly aware at an average of 4.71 that the
business must always pay its tax liability upon the date of filing of the tax return. At an
average of 4.76, the respondents are highly aware that the amount of the tax liability
explicitly written in the tax return must rarely in disagreement with the assessed amount
of the BIR Commissioner. The table also indicates that at an average of 4.71, the
respondents are highly aware that the business as a taxpayer must be keen to changes
in BIR regulations. The respondents are highly aware that it must be the companys
accountant who calculates and disseminates tax information regarding the companys
tax liability at an average of 4.64. An average of 4.69 of the respondents are highly
aware that the business must pay monthly and quarterly tax return. The overall

weighted mean of 4.7 indicates that the respondents are highly aware as to payment of
taxes.
3.5.

Civil Penalties and Surcharges

Table 28
Level of Awareness of the Organization's Management People
on Business Tax Management in the Aspects of Civil Penalties and Surcharges
Verbal
Weighte Interpretatio
Civil Penalties and Surcharges
d Mean n
The business must not neglect the filing of the tax return and
Highly
payment of the tax due to avoid surcharges
4.64 Aware
The business must never been involved in filing a fraudulent
Highly
tax return
4.67 Aware
The business must pay the penalties and surcharges
demanded by the BIR in case of failure to file and pay the
Highly
correct amount of the tax duly
4.64 Aware
Highly
Overall Weighted Mean
4.65 Aware
This indicates that the respondents are highly aware at an average of 4.64 that
the business must not neglect the filing of the tax return and payment of the tax due to
avoid surcharges.

At an average of 4.67, the respondents are highly aware that

business must never been involved in filing a fraudulent tax return. The table also
indicates that at an average of 4.64, the respondents are highly aware that the business
must pay the penalties and surcharges demanded by the BIR in case of failure to file
and pay the correct amount of the tax duly. The overall weighted mean of 4.65 indicates
that the respondents are highly aware as to civil penalties and surcharges.

4. level of effectiveness in terms of:


4.1. Registration
Table 29
Level of Effectiveness of the Organization's Management People on Business
Tax Management in the Aspects of Registration
4.2.

Keeping the accounting books/records


Table 30
Level of Effectiveness of the Organization's Management People on Business
Tax Management in the Aspects of Record Keeping

4.3.

Issuing official receipts and sales invoice


Table 31
Level of Effectiveness of the Organization's Management People on Business
Tax Management in the Aspects of Issuing Official Receipt and Sales Invoice

4.4.

Filing of the Monthly Value-added Tax Declaration


Table 32
Level of Effectiveness of the Organization's Management People on Business
Tax Management in the Aspects of Filing of Tax Return

4.5.

Paying the Tax

Table 33
Level of Effectiveness of the Organization's Management People on Business
Tax Management in the Aspects of Paying Tax
4.6.

Civil Penalties and Surcharges

Table 34
Level of Effectiveness of the Organization's Management People on Business
Tax Management in the Aspects of Civil Pelanties and Surcharges
5. Significant Differences between the level of Awareness and Respondents Profile
5.1.1. Age
Table 35
Significant Difference between the Level of Awareness and Profiles
When Grouped According to Age

This portrays the significant difference between the awareness and profiles when
grouped according to age. In terms of registration the computed p-test value of .138
higher than the level significance of .05. Thus, the hypothesis is accepted. Moreover, as
to keeping of accounting records and books, p-test value of .461 doesnt attain the
required value of significance. Therefore, the hypothesis is accepted. Issuance of sales
invoice and official receipts has the P-test value of .102 and doesnt meet the required
value of significance resulting to an accepted hypothesis. Filing of tax returns has the Ptest value of .391 thus the hypothesis is accepted. Likewise, in terms of payment of
taxes and civil penalties and surcharges have the P-test value of .227 and .086,
respectively. Thus, both variables dont attain the required value of significance and the
hypothesis is accepted.

5.1.2. Sex
Table 36
Significant Difference between the Level of Awareness and Profiles
When Grouped According to Sex
Indicator
Registration
Keeping of
Accounting Record
or Books
Issuance of Sales
Invoices and Official
Receipts
Filing of Tax Returns
Payment of Taxes
Civil Penalties and
Surcharges
Overall

Sex
Male
Femal
e
Male
Femal
e
Male
Femal
e
Male
Femal
e
Male
Femal
e
Male
Femal
e
Male

Mea
n
4.85
4.72

Fvalue

pvalue

Decision

Remarks

0.631

0.532

Accept
Ho

Not
Significant

-0.204

0.839

Accept
Ho

Not
Significant

0.796

0.431

Accept
Ho

Not
Significant

0.264

0.793

Accept
Ho

Not
Significant

0.805

0.425

Accept
Ho

Not
Significant

0.508

0.614

Accept
Ho

Not
Significant

0.527

0.601

Accept
Ho

Not
Significant

4.54
4.58
4.81
4.63
4.74
4.68
4.81
4.63
4.72
4.60
4.75

This table depicts the significant difference in the respondents perception


of the organizations level of awareness when they are grouped according to their sex.
In terms of registration the computed 0.532 p-value is higher than the level significance
of .05 thus, the hypothesis is accepted. Moreover, keeping of accounting record or
books the computed 0.839 p-value is higher than the level of significance of .05 thus,
the hypothesis is accepted. Issuance of sales invoices and Official Receipts, Payment
of Taxes, Civil Penalties and Surcharges got a p-value of 0.431, 0.793, 0.425, and 0.614

respectively, which is higher than the level of significance thus the hypothesis is
accepted. Overall, there is no significant difference in the respondents perception of the
organizations level of awareness when they are grouped according to their sex and the
decision is to accept the hypothesis.

5.1.3. Position in the store


Table 37
Significant Difference between the Level of Awareness and Profiles
When Grouped According to Position on the Business

This shows the significant difference between the level of awareness and profiles
when grouped according to position on the business. In terms of registration, keeping of
accounting records and book, issuance of sales invoices and official receipts, fillng of
tax returns, payment of taxes, and civil penalties and surcharges, the computed P-test

values are 0.000, 0.001, 0.000, 0.000, 0.000, and 0.000 respectively which lower than
the level significance of .05 Hence, all variables under perception of the store owner to
its staff on their level of compliance with Business Tax provisions attain the required
value of significance. The hypothesis on all variables is rejected.

5.1.4. Length of Service


Table 38
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Length of Service

3. Indicator
Registration
Keeping of
Accounting Record or
Books
Issuance of Sales
Invoices and Official
Receipts
Filing of Tax Returns
Payment of Taxes
Civil Penalties and
Surcharges
Overall

Length of
Service
1-5 years
6-10 years
1-5 years

Mea
n
4.85
4.72
4.54

6-10 years

4.58

1-5 years

4.81

6-10 years

4.63

1-5 years
6-10 years
1-5 years
6-10 years
1-5 years
6-10 years
1-5 years
6-10 years

4.74
4.68
4.81
4.63
4.72
4.60
4.75
4.64

Fvalue

pvalue

Decision

0.631

0.532

Accept Ho Not Significant

-0.204

0.839

Accept Ho Not Significant

0.796

0.431

Accept Ho Not Significant

0.264

0.793

Accept Ho Not Significant

0.805

0.425

Accept Ho Not Significant

0.508

0.614

Accept Ho Not Significant

0.527

0.601

Accept Ho Not Significant

Remarks

This table depicts the significant difference in the respondents perception of the
organizations level of awareness when they are grouped according to their length of
service. In terms of registration the computed p-value is higher than the level
significance of .05 thus, the hypothesis is accepted. Moreover, keeping of accounting
record or books the computed p-value is higher than the level of significance of .05 thus,

the hypothesis is accepted. . Issuance of sales invoices and Official Receipts, Filing of
Tax Returns, Payment of Taxes, Civil Penalties and Surcharges got a p-value of 0.431,
0.793, 0.425, and 0.614 respectively, which is higher than the level of significance thus
the hypothesis is accepted. Overall, there is no significant difference in the respondents
perception of the organizations level of awareness when they are grouped according to
length of service and the decision is to accept the hypothesis.

5.1.5. Highest Educational Attainment


Table 39
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Highest Educational Attainment

This shows the significant difference between the Level of Awareness and
profiles when grouped according to highest educational attainment. In terms of
registration, the computed F- test of 0.777 does not attain the required value of
significance. Hence, the hypothesis is accepted. Moreover, as to keeping of accounting

records and books, P-test value is 0.820 and it doesnt attain the required value of
significance. Therefore, the hypothesis is accepted. Furthermore, in terms as to
issuance of sales invoice and official receipts, the P-test value of 0.749 and doesnt
meet the required value of significance resulting to an accepted hypothesis. A filing of
tax returns has the P-test value of 0.027 and meets the required value of significance.
Thus, the hypothesis is rejected. Likewise, in terms of payment of taxes, the P-test
value is 0.494, thus, variable attained the required value of significance and the
hypothesis is rejected. And in terms of civil penalties and surcharges has the P-test
value of 0.424, respectively. Thus, all variable except filing of tax return doesn`t attained
the required value of significance and the hypothesis is accepted.

5.1.6. Form of Business


Table 40
Significant Difference between the Level of Awareness and Profiles
when Grouped According to Form of Business
Indicator
Registration
Keeping of
Accounting
Record or
Books
Issuance of
Sales
Invoices
and Official
Receipts
Filing of Tax
Returns

Payment of
Taxes
Civil
Penalties
and
Surcharges
Overall

Forms of
business
Sole
Proprietorhip
Partnership
Corporation
Sole
Proprietorhip
Partnership
Corporation
Sole
Proprietorhip
Partnership
Corporation
Sole
Proprietorhip
Partnership
Corporation
Sole
Proprietorhip
Partnership
Corporation
Sole
Proprietorhip
Partnership
Corporation
Sole
Proprietorhip
Partnership
Corporation

Mean

Fvalue

pvalue

Decision

Remarks

2.137

0.132

Accept
Ho

Not
Significant

0.413

0.665

Accept
Ho

Not
Significant

4.798

0.014

Reject
Ho

Significant

1.800

0.179

Accept
Ho

Not
Significant

2.873

0.069

Accept
Ho

Not
Significant

2.847

0.070

Accept
Ho

Not
Significant

2.078

0.139

Accept
Ho

Not
Significant

4.95
4.55
4.50
4.63
4.45
4.75
4.86
4.63
3.38
4.89
4.46
4.50
4.87
4.59
3.70
4.79
4.58
3.50
4.83
4.54
4.05

This shows the significant difference between the Level of Awareness and
profiles when grouped according to form of business. In terms of registration, the
computed F- test of 0.132 does not attain the required value of significance. Hence, the

hypothesis is accepted. Moreover, as to keeping of accounting records and books, Ptest value is 0.665 and it doesnt attain the required value of significance. Therefore, the
hypothesis is accepted. Furthermore, in terms as to issuance of sales invoice and
official receipts, the P-test value of 0.014 and does meet the required value of
significance resulting to rejected hypothesis. A filing of tax returns has the P-test value
of 0.179 and doesnt meet the required value of significance. Thus, the hypothesis is
accepted. Likewise, in terms of payment of taxes, the P-test value is 0.069, thus,
variable doesnt attain the required value of significance and the hypothesis is accepted.
And in terms of civil penalties and surcharges has the P-test value of 0.070,
respectively. Thus, all variable except issuance of sales invoice and official receipts
doesn`t attained the required value of significance and the hypothesis is accepted.

5.1.7. Years of Operation


Table 41
Significant Difference between the Level of Awareness and Profiles
When Grouped According to Years of Operation
Indicator
Registration
Keeping of
Accounting
Record or
Books
Issuance of
Sales Invoices
and Official
Receipts
Filing of Tax
Returns
Payment of
Taxes
Civil Penalties
and Surcharges
Overall

Years of
Operation
5 years
and below
6-10 years
5 years
and below

Mea
n

6-10 years

4.13

5 years
and below

4.71

6-10 years

4.50

5 years
and below
6-10 years
5 years
and below
6-10 years
5 years
and below
6-10 years
5 years
and below
6-10 years

4.79

Fvalue

pvalue

Decision

Remarks

0.889

0.379

Accept
Ho

Not
Significant

0.987

0.330

Accept
Ho

Not
Significant

0.401

0.691

Accept
Ho

Not
Significant

2.797

0.008

Reject Ho

Significant

0.991

0.328

Accept
Ho

Not
Significant

0.583

0.563

Accept
Ho

Not
Significant

1.199

0.238

Accept
Ho

Not
Significant

4.38
4.59

4.78
3.40
4.73
4.20
4.67
4.33
4.71
4.16

This table depicts the significant difference in the respondents perception of the
organizations level of awareness when they are grouped according to their years of
operation. In terms of registration the computed 0.379 p-value is higher than the level
significance of .05 thus, the hypothesis is accepted. Moreover, keeping of accounting
record or books the computed 0.330 p-value is higher than the level of significance of .
05 thus, the hypothesis is accepted. Issuance of sales invoices and Official Receipts,
Payment of Taxes, Civil Penalties and Surcharges got a p-value of 0.691, 0.328, and

0.563, respectively, which is higher than the level of significance thus the hypothesis is
accepted. However, in Filling of Tax Return the computed .008 p value is lower than
the level significance thus the hypothesis is rejected. Overall, there is no significant
difference in the respondents perception of the organizations level of awareness when
they are grouped according to their sex and the decision is to accept the hypothesis.
5.1.8. Capitalization
Table 42
Significant Difference between the Level of Awareness and Profiles
When Grouped According to Capitalization

This portrays the significant difference in the respondents perception of the


organizations level of awareness when they are grouped according to Capitalization. In
Registration, Keeping of Accounting Record or Books, Issuance of Sales Invoices and
Official Receipts, Payment of Taxes and Civil Penalties and Surcharges got a p-value of
0.203, 0.582, 0.872, 0.524 and 0.551 respectively, which is higher than the level of
significance of 0.05 thus the hypothesis is accepted. However, in Filing of Tax Return
the computed 0.049 is lower than the level of significance thus, the hypothesis is
rejected. Overall, there is no significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to highest
educational attainment and the decision is to accept the hypothesis.
5.1.9.

Number of Employee

Table 43
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Number of Employees

This depicts the significant difference in the respondents perception of the


organizations level of awareness when they are grouped according to number of
employees. In terms of registration the computed 0.223 p-value is higher than the level
significance of .05 thus, the hypothesis is accepted. Moreover, keeping of accounting
record or books the computed 0.483p-value is higher than the level of significance of .
05 thus, the hypothesis is accepted. . Issuance of sales invoices and Official Receipts,
Filing of Tax Returns, Payment of Taxes, Civil Penalties and Surcharges got a p-value of
0.579, 0.345, 0.314, and 0.242, respectively, which is higher than the level of
significance of 0.05 thus the hypothesis is accepted. Overall, there is no significant
difference in the respondents perception of the organizations level of effectiveness
when they are grouped according to their sex and the decision is to accept the
hypothesis.
5.2.1

Tax Filed And Paid

Table 44
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Tax Filed and Paid
Indicator
Registration
Keeping of
Accounting
Record or
Books
Issuance of
Sales Invoices
and Official
Receipts
Filing of Tax

Frequency of
tax filing and
payment
Monthly
Quarterly
Annually
Monthly
Quarterly

Mea
n
4.73
4.96
4.80
4.53
4.75

Annually

4.55

Monthly
Quarterly

4.64
4.89

Annually

4.80

Monthly

4.68

F-value

pvalue

Decision

0.380

0.687

Accept Ho Not Significant

0.334

0.718

Accept Ho Not Significant

0.381

0.686

Accept Ho Not Significant

0.163

0.850

Accept Ho Not Significant

Remarks

Quarterly
4.86
Annually
4.68
Monthly
4.66
Payment of
Quarterly
4.91
0.329
0.722 Accept Ho Not Significant
Taxes
Annually
4.68
Monthly
4.62
Civil Penalties
and
Quarterly
4.95
0.789
0.462 Accept Ho Not Significant
Surcharges
Annually
4.40
Monthly
4.64
Overall
Quarterly
4.89
0.411
0.666 Accept Ho Not Significant
Annually
4.65
This table depicts the significant difference in the respondents perception of the
Returns

organizations level of awareness when they are grouped according to their frequency of
tax filing and payment. In terms of registration the computed 0.687 p-value is higher
than the level significance of .05 thus, the hypothesis is accepted. Moreover, keeping of
accounting record or books the computed 0.718 p-value is higher than the level of
significance of .05 thus, the hypothesis is accepted. Issuance of sales invoices and
Official Receipts, Filing of Tax Returns, Payment of Taxes, Civil Penalties and
Surcharges got a p-value of 0.686, 0.850, 0.722, and 0.462 respectively, which is higher
than the level of significance thus the hypothesis is accepted. Overall, there is no
significant difference in the respondents perception of the organizations level of
awareness when they are grouped according to their frequency of tax filing and
payment, and the decision is to accept the hypothesis.

5.2.2

Frequency of Tax Filing

Table 45
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Frequency of Tax Filing

5.2.3 Frequency of tax payment


Table 46
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Frequency of Tax Payment

5.2.4 Duties and responsibilities


Table 47
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Duties and Reponsibility

This table depicts the significant difference in the respondents perception of the
organizations level of awareness when they are grouped according to their preparation
of financial statements. In terms of registration the computed 0.723 p-value is higher
than the level significance of .05 thus, the hypothesis is accepted. Moreover, keeping of
accounting record or books the computed 0.702 p-value is higher than the level of
significance of .05 thus, the hypothesis is accepted. On the other hand, Issuance of
sales invoices and Official Receipts and Filing of Tax Returns got a p-value of 0.014 and
0.225 respectively, which is lower than the level of significance of .05 thus, the

hypothesis is rejected. Payment of Taxes, Civil Penalties and Surcharges got a p-value
of 0.114 and 0.082 respectively, which is higher than the level of significance thus the
hypothesis is accepted. Overall, there is no significant difference in the respondents
perception of the organizations level of awareness when they are grouped according to
their preparation of financial statements, and the decision is to accept the hypothesis.

5.2.5 Use of computer


Table 48
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Use of Computer

5.2.6 Frequency of tax review


Table 49
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Frequency of Tax Review

This table depicts the significant difference in the respondents perception of the
organizations level of awareness when they are grouped according to their frequency of
tax review. In terms of registration the computed 0.875 p-value is higher than the level
significance of .05 thus, the hypothesis is accepted. Moreover, keeping of accounting
record or books the computed 0.704 p-value is higher than the level of significance of .
05 thus, the hypothesis is accepted. Issuance of sales invoices and Official Receipts,
Filing of Tax Returns, Payment of Taxes, Civil Penalties and Surcharges got a p-value of
0.836, 0.937, 0.876, and 0.566 respectively, which is higher than the level of

significance thus the hypothesis is accepted. Overall, there is no significant difference in


the respondents perception of the organizations level of awareness when they are
grouped according to their frequency of tax review, and the decision is to accept the
hypothesis.

6. Significant Differences between the level of Effectiveness and Respondents Profile


6.1.1. Age
Table 50
Significant Difference between the Level of Effectiveness and Profiles
When Grouped According to Age

This depicts the significant difference in the respondents perception of the


organizations level of effectiveness when they are grouped according to their sex. In
terms of registration the computed 0.055 p-value is higher than the level significance of .
05 thus, the hypothesis is accepted. Moreover, keeping of accounting record or books
the computed 0.321 p-value is higher than the level of significance of .05 thus, the
hypothesis is accepted. . Issuance of sales invoices and Official Receipts, Filing of Tax

Returns, Payment of Taxes, Civil Penalties and Surcharges got a p-value of 0.230,
0.070, 0.225, and 0.136, respectively, which is higher than the level of significance of
0.05 thus the hypothesis is accepted. Overall, there is no significant difference in the
respondents perception of the organizations level of effectiveness when they are
grouped according to their sex and the decision is to accept the hypothesis.

6.1.2. Sex
Table 51
Significant Difference between the Level of Effectiveness and Profiles
When Grouped According to Sex
Indicator
Registration
Keeping of
Accounting Record
or Books
Issuance of Sales
Invoices and Official
Receipts
Filing of Tax Returns
Payment of Taxes
Civil Penalties and
Surcharges
Overall

Sex
Male
Femal
e
Male
Femal
e
Male
Femal
e
Male
Femal
e
Male
Femal
e
Male
Femal
e
Male
Femal
e

Mea
n
4.93
4.71

Fvalue

pvalue

Decision

Remarks

1.545

0.134

Accept
Ho

Not
Significant

2.015

0.052

Accept
Ho

Not
Significant

0.424

0.674

Accept
Ho

Not
Significant

0.841

0.405

Accept
Ho

Not
Significant

0.515

0.609

Accept
Ho

Not
Significant

0.267

0.791

Accept
Ho

Not
Significant

0.940

0.353

Accept
Ho

Not
Significant

4.85
4.42
4.78
4.70
4.80
4.60
4.72
4.59
4.72
4.67
4.80
4.61

This table depicts the significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to their sex. In

terms of registration the computed 0.134 p-value is higher than the level significance of .
05 thus, the hypothesis is accepted. Moreover, keeping of accounting record or books
the computed 0.052 p-value is higher than the level of significance of .05 thus, the
hypothesis is accepted. . Issuance of sales invoices and Official Receipts, Filing of Tax
Returns, Payment of Taxes, Civil Penalties and Surcharges got a p-value of 0.674,
0.405, 0.609, and 0.791, respectively, which is higher than the level of significance of
0.05 thus the hypothesis is accepted. Overall, there is no significant difference in the
respondents perception of the organizations level of effectiveness when they are
grouped according to their sex and the decision is to accept the hypothesis.
6.1.3. Position in the store
Table 52
Significant Difference between the Level of Effectiveness and Profiles
When Grouped According to Position on the Business
This depicts the significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to their position
on the business. In terms of registration the computed 0.000 p-value is lower than the
level significance of .05 thus, the hypothesis is rejected. Moreover, keeping of
accounting record or books the computed 0.000 p-value is lower than the level of
significance of .05 thus, the hypothesis is also rejected. Issuance of sales invoices and
Official Receipts, Payment of Taxes, Civil Penalties and Surcharges got a p-value of
0.000, 0.000, and 0.00, respectively, which is lesser than the level of significance thus
the hypothesis is rejected. Therefore, overall, there is significant difference in the
respondents perception of the organizations level of effectiveness when they are

grouped according to their position on the business and the decision is to reject the
hypothesis

6.1.4. Length of Service


Table 53
Significant Difference between the Level of Effectiveness and Profiles When
Grouped According to Length of Service

This table depicts the significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to their length of
service. In terms of registration the computed 0.134 p-value is higher than the level
significance of .05 thus, the hypothesis is accepted. Moreover, keeping of accounting
record or books the computed 0.052 p-value is higher than the level of significance of .
05 thus, the hypothesis is accepted. Issuance of sales invoices and Official Receipts,
Filing of Tax Returns, Payment of Taxes, Civil Penalties and Surcharges got a p-value of
0.674, 0.405, 0.609, and 0.791, respectively, which is higher than the level of
significance of 0.05 thus the hypothesis is accepted. Overall, there is no significant
difference in the respondents perception of the organizations level of effectiveness
when they are grouped according to their length of service and the decision is to accept
the hypothesis.

6.1.5. Highest Educational Attainment


Table 54
Significant Difference between the Level of Awareness and Profiles When
Grouped According to Highest Educational Attainment

This portrays the significant difference in the respondents perception of


the organizations level of effectiveness when they are grouped according to Highest
Educational Attainment. In terms of registration the computed 0.813 p-value is higher

than the level significance of .05 thus, the hypothesis is accepted. Moreover, keeping of
accounting record or books the computed 0.734 p-value is higher than the level of
significance of .05 thus, the hypothesis is accepted. Issuance of sales invoices and
Official Receipts, Filing of Tax Returns, Payment of Taxes got a p-value of 0.086, 0.471,
and 078, respectively, which is higher than the level of significance of 0.05 thus the
hypothesis is accepted. However, in Civil Penalties and Surcharges the computed 0.033
is lower than the level of significance thus, the hypothesis is rejected. Overall, there is
no significant difference in the respondents perception of the organizations level of
effectiveness when they are grouped according to highest educational attainment and
the decision is to accept the hypothesis.

6.1.6. Form of Business


Table 55
Significant Difference between the Level of Effectiveness and Profiles
when Grouped According to Form of Business

This depicts the significant difference in the respondents perception of the


organizations level of effectiveness when they are grouped according to their form of
business. In terms of registration the computed 0.383 p-value is higher than the level
significance of .05 thus, the hypothesis is accepted. Moreover, keeping of accounting
record or books the computed 0.135 p-value is higher than the level of significance of .
05 thus, the hypothesis is accepted. . Issuance of sales invoices and Official Receipts
got a p-value of 0.205 which is higher than the level of significance of 0.05 thus the
hypothesis is accepted. While, filing of tax return and payment of taxes got a p-value of
0.044 and 0.040 respectively, which is lower than the level of significance of 0.05 thus
the hypothesis is rejected.

The hypothesis is accepted in Civil Penalties and

Surcharges for it has a p-value of 0.525 which is above the level of significance value.
Overall, there is no significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to their sex and
the decision is to accept the hypothesis.

6.1.7. Years of Operation


Table 56
Significant Difference between the Level of Effectiveness and Profiles
When Grouped According to Years of Operation
Indicator
Registration
Keeping of
Accounting
Record or
Books
Issuance of
Sales
Invoices
and Official
Receipts
Filing of Tax
Returns
Payment of
Taxes
Civil
Penalties
and
Surcharges
Overall

Years of
Operation
5 years and
below
6-10 years
5 years and
below

Mea
n

6-10 years

4.25

5 years and
below

4.77

6-10 years
5 years and
below
6-10 years
5 years and
below
6-10 years
5 years and
below
6-10 years
5 years and
below
6-10 years

4.80

Fvalue

pvalue

Decision

Remarks

-0.194

0.847

Accept
Ho

Not
Significant

0.655

0.516

Accept
Ho

Not
Significant

1.823

0.076

Accept
Ho

Not
Significant

1.120

0.269

Accept
Ho

Not
Significant

2.153

0.037

Reject Ho

Significant

1.541

0.131

Accept
Ho

Not
Significant

1.318

0.195

Accept
Ho

Not
Significant

4.88
4.62

4.00
4.72
4.10
4.71
3.50
4.73
4.00
4.72
4.12

This table depicts the significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to their sex. In
terms of registration the computed 0.847 p-value is higher than the level significance of .
05 thus, the hypothesis is accepted. Moreover, keeping of accounting record or books
the computed 0.516 p-value is higher than the level of significance of .05 thus, the
hypothesis is accepted. Issuance of sales invoices and Official Receipts, Filing of Tax
Returns, Civil Penalties and Surcharges got a p-value of 0.076, 0.269, and 0131,
respectively, which is higher than the level of significance of 0.05 thus the hypothesis is
accepted. However, in Payment of Taxes the computed 0.037 is lower than the level of
significance thus, the hypothesis is rejected. Overall, there is no significant difference in
the respondents perception of the organizations level of effectiveness when they are
grouped according to their sex and the decision is to accept the hypothesis.

6.1.8. Capitalization
Table 57
Significant Difference between the Level of Effectiveness and Profiles
When Grouped According to Capitalization

This portrays the significant difference between the effectiveness and


profiles when grouped according to capitalization. In terms of registration the computed
p-test value of .679 higher than the level significance of .05. Thus, the hypothesis is
accepted. Moreover, as to keeping of accounting records and books, p-test value of .
697 doesnt attain the required value of significance. Therefore, the hypothesis is

accepted. Issuance of sales invoice and official receipts has the P-test value of .238 and
doesnt meet the required value of significance resulting to an accepted hypothesis.
Filing of tax returns has the P-test value of .526 thus the hypothesis is accepted.
Likewise, in terms of payment of taxes and civil penalties and surcharges have the Ptest value of .155 and .306, respectively. Thus, both variables dont attain the required
value of significance and the hypothesis is accepted.

6.1.9.

Number of Employee

Table 58
Significant Difference between the Level of Effectiveness and Profiles When
Grouped According to Number of Employees

This depicts the significant difference in the respondents perception of the


organizations level of effectiveness when they are grouped according to number of
employees. In terms of registration the computed 0.051 p-value is higher than the level
significance of .05 thus, the hypothesis is accepted. Moreover, keeping of accounting

record or books the computed 0.065p-value is higher than the level of significance of .
05 thus, the hypothesis is accepted. . Issuance of sales invoices and Official Receipts,
Filing of Tax Returns, Payment of Taxes, Civil Penalties and Surcharges got a p-value of
0.354, 0.266, 0.320, and 0.130, respectively, which is higher than the level of
significance of 0.05 thus the hypothesis is accepted. Overall, there is no significant
difference in the respondents perception of the organizations level of effectiveness
when they are grouped according to their sex and the decision is to accept the
hypothesis.

6.1.10.

Tax Filed And Paid

Table 59
Significant Difference between the Level of Effectivess and Profiles When
Grouped According to Tax Filed and Paid

Indicator

Registration
Keeping of
Accounting
Record or
Books
Issuance of
Sales Invoices
and Official
Receipts
Filing of Tax
Returns
Payment of
Taxes

Frequency
of tax filing
and
payment
Monthly
Quarterly
Annually
Monthly
Quarterly

Mea
n
4.82
4.86
4.65
4.63
4.64

Annually

4.35

Monthly
Quarterly

4.72
4.89

Annually

4.60

Monthly
Quarterly
Annually
Monthly
Quarterly
Annually

4.67
4.94
4.40
4.63
4.86
4.44

Fvalue

pvalue

Decision

Remarks

0.247

0.782

Accept
Ho

Not
Significant

0.291

0.749

Accept
Ho

Not
Significant

0.373

0.691

Accept
Ho

Not
Significant

0.748

0.480

Accept
Ho

Not
Significant

0.395

0.676

Accept
Ho

Not
Significant

Civil Penalties
and
Surcharges
Overall

Monthly
Quarterly
Annually
Monthly
Quarterly
Annually

4.70
4.86
4.40
4.70
4.84
4.47

0.700

0.503

Accept
Ho

Not
Significant

0.478

0.623

Accept
Ho

Not
Significant

This table depicts the significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to their frequency
of tax filing and payment. In terms of registration the computed 0.782 p-value is higher
than the level significance of .05 thus, the hypothesis is accepted. Moreover, keeping of
accounting record or books the computed 0.749 p-value is higher than the level of
significance of .05 thus, the hypothesis is accepted. Issuance of sales invoices and
Official Receipts, Filing of Tax Returns, Payment of Taxes, Civil Penalties and
Surcharges got a p-value of 0.691, 0.480, 0.676, and 0.503 respectively, which is higher
than the level of significance thus the hypothesis is accepted. Overall, there is no
significant difference in the respondents perception of the organizations level of
effectiveness when they are grouped according to their frequency of tax filing and
payment, and the decision is to accept the hypothesis.

5.2.7 Frequency of Tax Filing


Table 60
Significant Difference between the Level of Effectiveness and Profiles When
Grouped According to Frequency of Tax Filing

5.2.8 Frequency of tax payment


Table 61
Significant Difference between the Level of Effectiveness and Profiles When
Grouped According to Frequency of Tax Payment

5.2.9 Duties and responsibilities


Table 62
Significant Difference between the Level of Effectiveness and Profiles When
Grouped According to Duties and Reponsibility

This table depicts the significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to their
preparation of financial statements. In terms of registration the computed 0.075 p-value
is higher than the level significance of .05 thus, the hypothesis is accepted. Moreover,
keeping of accounting record or books the computed 0.676 p-value is higher than the
level of significance of .05 thus, the hypothesis is accepted. Issuance of sales invoices
and Official Receipts, Filing of Tax Returns, Civil Penalties and Surcharges got a pvalue of 0.124, 0.052, and 0.277 respectively, which is higher than the level of

significance thus the hypothesis is accepted. On the other hand, Payment of Taxes got
a p-value of 0.030, which is lower than the level of significance of .05 thus, the
hypothesis is rejected. Overall, there is no significant difference in the respondents
perception of the organizations level of effectiveness when they are grouped according
to their preparation of financial statements, and the decision is to accept the hypothesis

5.2.10 Frequency of tax review


Table 49
Significant Difference between the Level of Effectviness and Profiles When
Grouped According to Frequency of Tax Review

This table depicts the significant difference in the respondents perception of the
organizations level of effectiveness when they are grouped according to their frequency

of tax review. In terms of registration the computed 0.168 p-value is higher than the
level significance of .05 thus, the hypothesis is accepted. Moreover, keeping of
accounting record or books the computed 0.771 p-value is higher than the level of
significance of .05 thus, the hypothesis is accepted. Issuance of sales invoices and
Official Receipts, Filing of Tax Returns, Civil Penalties and Surcharges got a p-value of
0.371, 0.056, and 0.460 respectively, which is higher than the level of significance thus
the hypothesis is accepted.

Overall, there is no significant difference in the

respondents perception of the organizations level of effectiveness when they are


grouped according to their frequency of tax review and the decision is to accept the
hypothesis,except the Payment of Taxes 0.038 which lies below the required level of .05
therefore the hypothesis is rejected,