ABC Corporation registered before the Philippine Economic Zone Authority (PEZA) to avail of the tax incentives in 2015. Its stated Start of Commercial Operations is January 1, 2016. ABC Corporation is registered as a Pioneer firm, which based on the Special Economic Zone Act, is entitled to six (6) years of income tax holiday and a perpetual enjoyment of the five percent (5%) gross income tax after the expiration of the period to avail of the income tax holiday.

During the table years 2021 and 2022, ABC Corporation had the following amounts reflected in its audited income statement:

	2021	2022
Sales	P12,000,000	P14,500,000
Less: Cost of goods sold	(7,800,000)	(9,425,000)
Gross profit	4,200,000	P5,075,000
Less: Operating expenses	(1,890,000)	(2,283,000)
Operating income	2,310,000	2,792,000
Less: Interest expense	(300,000)	(320,000)
Earnings before taxes	P2,010,000	P2,472,000

Part of the requirements of the PEZA is the submission of Articles of Incorporation of the corporation if any amendment has been made. ABC Corporation amended its Articles of Incorporation to indicate a secondary purpose, but it has failed to furnish PEZA with its amended Articles of Incorporation. As a result, PEZA imposed a fine against ABC Corporation.

Statement 1: Assuming ABC Corporation is an export enterprise, ABC Corporation can simultaneously avail of special corporate income tax and enhanced deductions.

Statement 2: Assuming ABC Corporation is a critical domestic market enterprise, ABC Corporation may choose between the availment of special corporate income tax or enhanced deduction, but never both simultaneously.

a. Both Statements are not true

b. Only Statement 2 is true

c. Only Statement 1 is true

d. Both Statements are true