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TIKTOK INC was assessed by the BIR. During the course of assessment, it was found out that TIKTOK INC, an importer of food products, deficiency income and value-added taxes, plus 50% surcharged after determining that TIKTOK INC had under-declared its sales by an amount exceeding 30% of that declared in its income tax and VAT returns.

TIKTOK INC.  denied the alleged under-declaration, PROTESTED THE DEFICIENCY ASSESSMENT for income and value-added taxes and challenged the imposition of the 50% surcharge on the ground that the surcharged may only be imposed if TIKTOK INC fails to pay the deficiency taxes within the time prescribed for their payment in the notice of assessment.

a. Is the imposition of the 50% surcharge proper? Why or why not?

b. If your answer to (a) is yes, may TIKTOK INC.  enter into a compromise with the BR for reduction of the amount of surcharged to be paid?