School Teaching November 2 - 6, 2020
Calulut Integrated School (SHS) Dates/ Week
(Week 3)
Teacher Semester / SY First / S.Y. 2020-2021
Rosyl D. Guiao Quarter 2nd
DETAILED LESSON PLAN IN FUNDAMENTALS OF ACCOUNTANCY,
BUSINESS AND MANAGEMENT 2
I. Objectives
A. Content Standards
The learner demonstrates an understanding of the sound principles of taxation, its purpose, and preparation of
forms and payment of taxes.
B. Performance Standards
The learner shall be able to accomplish the BIR (Bureau of Internal Revenue) forms.
C. Learning Competencies
The learner:
MELC No. 4. defines income and business taxation and its principles and processes.(ABM_FABM12-IIh-j-15)
D. Objectives
At the end of the topic, the learner should be able to:
1. define taxation.
2. enumerate and differentiate the three inherent powers of the government.
3. enumerate and describe the income taxpayers.
4. enumerate and explain the different kinds of income.
II. Content
Income and Business Taxation
III. Learning Resources
A. References
Fundamentals of Accountancy, Business and Management 2 by J. Beticon,et al (LM) ; pp. 160 - 179
Fundamentals of Accountancy, Business and Management 2 by J. Beticon,et al (TM) ; pp. 184 - 212
Fundamentals of Accountancy, Business and Management 2 by CHED (TG) ; pp. 171 - 185
Fundamentals of Accountancy, Business and Management 2 by D. Salazar (TX) ; pp. 197 - 237
B. Other Learning Resources
[Link]
[Link]
500-individual-taxpayers/story/
[Link]
IV. Procedures
A. Reviewing Previous Lesson or Presenting the New Lesson
How are you? We’re down to our last few topics for the second quarter. Were you able to ask your parents about
the taxes they are paying? What did they say?
It is often quoted that there are only two permanent things in this world, change and taxes. This is because paying
taxes is one of the basic responsibilities of every individual. You are studying in high school for free because of your parents’
contribution to the government - by paying taxes.
B. Establishing a Purpose for the Lesson
Figure 1. Celebrity Taxpayers
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Kasali ba ang mga paborito mong artista sa mga nagbabayad ng tamang buwis sa BIR? Makikita mo sa Figure 1
bandang kaliwa, ang listahan ng top 14 endorsers noong 2013; ngunit tatlo sa kanila ay hindi kasama sa BIR’s Top 500
Taxpayers list. Marami namang endorsements sina Carmina Villaroel, Zoren Legaspi at Marian Rivera, pero bakit kaya
hindi sila kasama sa top 500 list ng BIR? Makikita naman natin sa bandang kanan ng Figure 1 ang mga “most trusted
endorsers” noong 2013; ngunit sampu sa kanila ay hindi rin kasama sa listahan ng BIR na top 500 taxpayers list. Sila ay
sina Richard Yap, Paulo Avelino, Enrique Gil, Zoren Legaspi, Kathryn Bernardo, Maja Salvador, Carmina Villaroel, Julia
Montes, Jodi Sta. Maria at Marian Rivera. Bawat isa sa kanila ay may kanya-kanyang dahilan.
Kapag alam ng mga tao, lalo na ng BIR, na malaki ang kinikita ng isang tao o korporasyon, ini-expect rin nila na
malaki rin ang binabayad nila na tax o buwis. Kaya’t magtataka ang ilan kung wala sila sa listahan ng BIR bilang top
taxpayers. Ano ba ang tax o buwis? Sino-sino ang dapat magbayad ng buwis? Alamin natin ang mga iyan sa ating lesson
ngayon.
C. Presenting Examples/Instances of the New Lesson
What is taxation?
• Taxation is the process by which our government, through lawmakers, raises income to pay its necessary
expenses.
• Our Congress, through our senators and congressmen, enacts tax laws.
• Tax laws give our government the authority to collect the necessary taxes from its constituents.
What are the three (3) inherent powers of the government?
(Ano ang tatlong likas na kapangyarihan ng gobyerno?)
1. Eminent Domain
✓ It is the power of the government to take a private property, upon payment of just compensation, to be
used for a public purpose.
✓ Examples: buying a private property to be converted to a public road or as a site for a public hospital.
✓ The private citizen cannot refuse as long as the government could prove that it is indeed for a public
purpose.
2. Police Power
✓ This is the power of the government to make laws that will promote public health, morals, safety, and
welfare of the people.
✓ It can prohibit certain activities and products if they feel that is dangerous to the people.
✓ Example: curfews; penalties for crimes committed
3. Taxation
✓ The power of the government to collect taxes that will be used to finance the different projects needed
by the people.
Let us have an activity!
Activity 1: Examples from the News!
• Look for an article in the news which talks about the Philippine government exercising its inherent powers.
• Submit three (3) news articles representing an article each for: 1) eminent domain; 2) police power; and 3)
taxation.
• Write the following information:
o Publisher
o Title of the article
o Writer of the article
o Date of the article
o Summary of the article talking about the inherent power
o Own reflection of the news article (2 paragraphs)
D. Discussing New Concepts and Practicing New Skills #1
What is Income Tax?
• The tax on the net income or the entire income earned in one taxable year.
Classifications of Income Taxpayers:
1. Individuals
• The requirements on individuals are based on the source of income.
• For income tax purposes, individuals can be further classified into four, namely:
a. Resident Citizen (RC)
▪ is a Filipino citizen and lives or resides in the Philippines.
▪ taxable on all income derived from sources within and without (outside) the Philippines.
b. Non-resident Citizen (NRC)
▪ is a Filipino citizen but does not live or reside in the Philippines.
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▪ taxable only on income derived from sources within the Philippines.
▪ an Overseas Filipino Worker (OFW) is taxable only on income from sources within the Philippines.
c. Resident Alien (RA)
▪ is a citizen of another foreign country but lives or resides in the Philippines during the taxable year.
▪ taxable only on income derived from sources within the Philippines.
d. Non-resident Alien (NRA)
▪ is a citizen of another foreign country and does not live or reside in the Philippines.
▪ taxable only on income derived from sources within the Philippines.
d.1 Engaged in trade or business (NRA-ETB)
✓ a foreigner in the Philippines and stays in the country for a total period of more than 180 days
during the calendar year.
d.2 Not engaged in trade or business (NRA-NETB)
✓ a foreigner in the Philippines and stays in the country for less than 180 days during the
calendar year.
2. Corporations
• A corporation is a legal entity that is separate from the owners for tax purposes.
• A corporation is separately taxed from its owners; owners are taxed individually.
Important Notes:
➢ Kung mapapansin mo, tanging Resident Citizen (RC) lamang ang taxable ang income na kinita niya dito sa loob at
labas ng Pilipinas.
➢ Ang iba, tinatax lang ang income na kanilang kinita sa loob ng bansa; pero ang kinita nila sa labas ng bansa ay
hindi na kasali.
E. Discussing New Concepts and Practicing New Skills #2
Individuals can earn from at least three different kinds of income:
Kinds of Income:
1. Compensation Income
▪ This is the income received by employees working for different companies.
▪ This is usually in the form of salaries, bonuses, and allowances.
▪ Employers are required by law to withhold income tax dues from their employees’ salaries. This is done
through payroll deductions. The employers deduct income taxes from the employees’ salaries and remit
those to the government on a monthly basis.
▪ Examples: public school teachers; bank tellers; janitors; etc.
▪ Allowable deductions for these taxpayers are social security contributions such as SSS, GSIS,
Philhealth and Pag-ibig premiums.
▪ Ang mga may compensation income ay mga empleyado ng isang kumpanya or yaong mga
nagtatrabaho sa isang employer. Ang tax nila ay wini-withhold o dini-deduct ng kanilang employer sa
sweldo nila tuwing sahod para hindi masyadong mabigat ang babayarang tax pagdating ng katapusan
ng taon. Paano malalaman kung tama ang dini-deduct na tax sa sweldo nila? Kalimitan sa buwan ng
Disyembre ay kino-compute na ng kumpanya ang tax nila para sa isang buong taon. Kung sumobra
man ang na-deduct ay ibabalik ito sa kanila; kapag naman kulang pa ay ide-deduct pa sa sweldo nila
ng buwan ng Disyembre. Kung kaya’t minsan, ang iba ay lumalaki ang tax pagdating ng December at
ang iba naman ay lumiliit o wala ng deduction dahil sapat na ang na-withhold sa kanila during the whole
year.
2. Income from Business or Practice of Profession
▪ This is the income coming from self-employed and professional individuals (SEPs).
▪ Examples: meat vendors, taxi operators, and the likes
▪ Included also are professionals like lawyers, doctors, and accountants (professional income).
▪ Talent fees of professional entertainers, athletes, etc are also included here.
▪ Allowable deductions such as business expenses may be considered for these taxpayers.
▪ Ang mga ito ay hindi mga regular na empleyado na sumusweldo buwan-buwan. May sarili silang
income na nanggagaling sa kanilang business o di kaya naman ay sa pag-practice ng kanilang
profession or talent. Kapag may mga nagastos sila o expenses na ina-allow sa tax law ay pwede nilang
mai-deduct sa kanilang gross income. Kung natatandaan mo pa ang Statement of Comprehensive
Income (SCI), nako-compute natin sa pinakahuli ang net taxable income.
3. Passive Income
▪ These are income generated by different investments made by the individual.
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▪ Examples: interest from bank deposits; prizes and winnings (PCSO winnings and prizes P10,000 and
below are exempt); royalties on books, literary works, and musical compositions
F. Developing Mastery
Activity 2: Identification of Taxable Income
Refer to the income and expenses in the first column of the table below. Under each type of individual taxpayer,
put a check (√) mark if the income and/or expenses is/are to be included as taxable income and a cross (x)
mark if not to be included in the taxable income of each type of individual taxpayer: a) Resident citizen (RC);
b) Non-resident citizen (NRC); c) Resident alien (RA); d) Non-resident alien-engaged in trade or business (NRA-
ETB); and e) Non-resident alien-not engaged in trade or business (NRA-NETB).
RC NRC RA NRA- NRA-
INCOME & EXPENSES
ETB NETB
1. Compensation income, Philippines
2. Statutory contributions, Philippines (deduction)
3. Compensation income, Hongkong
4. Business income, Philippines
5. Business income, Indonesia
6. Business expenses, Philippines (deduction)
7. Business expenses, Indonesia (deduction)
8. Professional talent fee, Philippines
9. Raffle prizes won in the Philippines
10. PCSO winnings (P5,000)
(Refer to page 5 for the answer key)
G. Finding Practical Applications of Concepts and Skills in Daily Living
Activity 3: News Article Analysis!
Are you updated with the current events? Below is a news article about the directive of BIR to tax online sellers.
Read the article and write your own position/reflection about the subject. Are you in favor or not? Why?
H. Making Generalizations and Abstractions About the Lesson
Our lesson in a nutshell:
• Taxation is the process by which our government, through lawmakers, raises income to pay its necessary
expenses.
• The three (3) inherent powers of the government are: 1) Eminent Domain; 2) Police Power; and Taxation
• Income Tax is the tax on the net income or the entire income earned in one taxable year.
• The two major classifications of income taxpayers are: individuals and corporations.
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• Individuals are further classified into following: Resident Citizen (RC); Non-resident Citizen (NRC); Resident
Alien (RA); Non-resident Alien (NRA) who are Engaged in trade or business (NRA-ETB) and Not engaged in
trade or business (NRA-NETB)
• Taxpayers can earn these different kinds of income: Compensation Income; Income from Business or Practice
of Profession; and Passive Income
I. Evaluating Learning
Activity 4: Comprehensive Problem
Are you now ready for a quiz? Get a yellow pad paper; a pen and a calculator. Refer to the income and expenses
below of a taxpayer:
A. Compensation Income, Philippines P400,000
B. Statutory Contributions, Philippines 150,000
C. Compensation Income, Japan 340,000
D. Business Income, Philippines 900,000
E. Business Income, Taiwan 100,000
F. Business Expenses, Philippines 266,000
G. Business Expenses, Taiwan 46,000
H. Professional Talent Fee, Philippines 650,000
I. Raffle Prizes, Philippines 11,000
J. PCSO Winnings 15,000
Required:
Compute for the total taxable income if the payer is a:
• Resident citizen (RC)
• Non-resident citizen (NRC)
• Resident alien (RA)
• Non-resident alien-engaged in trade or business (NRA-ETB)
• Non-resident alien-not engaged in trade or business (NRA-NETB)
J. Additional Activities for Application or Remediation
Assignment: Search the internet and look for a news article about the TRAIN Law.
ANSWER KEY:
Activity 2: Identification of Taxable Income
RC NRC RA NRA- NRA-
INCOME & EXPENSES
ETB NETB
1. Compensation income, Philippines √ √ √ √ √
2. Statutory contributions, Philippines (deduction) √ √ √ √ x
3. Compensation income, Hongkong √ x x x x
4. Business income, Philippines √ √ √ √ √
5. Business income, Indonesia √ x x x x
6. Business expenses, Philippines (deduction) √ √ √ √ x
7. Business expenses, Indonesia (deduction) √ x x x x
8. Professional talent fee, Philippines √ √ √ √ √
9. Raffle prizes won in the Philippines √ √ √ √ √
10. PCSO winnings (P5,000) x x x x x
Note:
• Only resident citizens (RC) are taxable on income derived from sources both within and outside the
Philippines.
• All others are taxable only on income derived from sources within the Philippines.
• Non-resident aliens-not engaged in trade or business (NRA-NETB) are taxable (final tax) on gross income
from sources within the Philippines.
Prepared by: Checked and Noted:
ROSYL D. GUIAO RANDY G. SALVADOR
Subject Teacher OIC, School Head SHS
CP#09254792604
