TAXATION REVIEW INTRODUCTION January 25,2017

Multiple Choice. Identify the letter of the choice that best completes the statement or answers the question.
1. Which of the following statements is not the accepted definition of 15. Which statement is wrong? [A] A tax is a demand of sovereignty.
the power of taxation? [A] Taxation is the power by which the [B] A toll is a demand of ownership. [C] A special assessment is a
sovereign raises revenue to defray the expenses of the tax. [D] Customs duty is a tax.
government. [B] Taxation involves the power to destroy. [C] 16. Which statement refers to police power as distinguished from
Taxation is the destructive authority which interferes with the taxation? [A] It can only be imposed on specific purposes. [B] The
personal and property rights of the people and takes from them a amount imposed depends on whether the activity is useful or not.
portion of their property for the support of the government. [D] [C] It involves the taking of property by the government. [D] The
Taxation refers to that power of the state to impose a charge or amount imposed has no limit.
burden upon person, property, or property rights, for the use and 17. The following are the similarities of the inherent power of taxation,
support of the government. eminent domain and police power, except: [A] They are necessary
2. Which of the following statements is most correct? Statement 1. As attributes of sovereignty. [B] They interfere with private rights and
an incident of sovereignty, the power to tax has been described as property. [C] They affect all persons or the public. [D] They are
unlimited in its range, acknowledging in its very nature no limits, so legislative in implementation.
that security against its abuse is to be found only in the 18. The proportional contribution by person and property levied by the
responsibility of the legislature which imposes the tax on the law-making body of the State by virtue of its sovereignty for the
constituency who are to pay it. Statement 2. The power of taxation support of the government and for all its public needs is referred to
is an essential and inherent attribute of sovereignty, belonging as a as: [A] Taxes. [B] Special Assessment. [C] License Fees. [D] Answer
matter of right to every independent government, being expressly not given.
conferred by the people. [A] Statement 1. [B] Statement 2. [C] Both 19. In this power of the state, the person who is parting with his
statements. [D] None of the above. money or property is presumed to receive a benefit. [A] Taxation.
3. Which statement refers to police power as distinguished from [B] Police power. [C] Eminent domain. [D] Forfeiture power.
taxation? [A] It can only be imposed on specific property or 20. As a basic principle of taxation, Taxes must be based on the
properties. [B] The amount imposed depends on whether the taxpayers ability to pay is called: [A] Equality in taxation. [B]
activity is useful or not. [C] It involves the taking of property by the Ability to pay theory. [C] Theoretical justice. [C] Equity in taxation.
government. [D] The amount imposed has no limit. 21. Tax of a fixed proportion of the value of the property with respect
4. Which of the following statements is not correct? [A] Taxation is an to which the tax is assessed and requires the intervention of
absolute power. [B] Taxation does not owe its origin from the assessors of appraisers to estimate the value of such property
constitution. [C] Tax laws must not violate constitutional before the amount due from each taxpayer can be determined is
restrictions. [D] Despite its tonicity, the power of taxation is subject known as: [A] Specific. [B] Ad Valorem. [C] Special or regulatory. [D]
to its own limitations. Answer not given.
5. Which of the following may not raise money for the government? 22. The basis of taxation is the reciprocal duties of protection and
[A] Police power. [B] Power of taxation. [C] Power of eminent support between the State and its inhabitants [A] Necessity Theory.
domain. [D] Privatization of governments capital assets. [B] Benefits-Protection Theory. [C] Ability to Pay. [D] Lifeblood
6. One of the characteristics of internal revenue laws is that they are: Theory.
[A] Criminal in nature. [B] Penal in nature. [C] Political in nature. [D] 23. Which of the following statements is not correct? [A] An inherent
Generally prospective in application. limitation of taxation may be disregarded by the application of a
7. In case of conflict between tax laws and generally accepted constitutional limitation. [B] The property of an educational
accounting principles [GAAP]: [A] Both tax laws and GAAP shall be institution operated by a religious order is exempt from property
enforced. [B] GAAP shall prevail over tax laws. [C] Tax laws shall tax, but its income is subject to income tax. [C] The prohibition of
prevail over GAAP. [D] The issue shall be resolved by the courts. delegation by the state of the power of taxation will still allow the
8. The following are similarities of the inherent power of taxation, Bureau of Internal Revenue to modify the rules on time for filing of
eminent domain, and police power, except: [A] Are necessary returns and payment of taxes. [D] The power of taxation is shared
attributes of sovereignty. [B] Interfere with privates rights and by the legislative and executive departments of the government.
property. [C] Affect all persons or the public. [D] Are legislative in 24. Which of the following is not an element of direct double taxation?
implementation. [A] Two taxes or more. [B] Same subject matter. [C] Same taxable
9. Which of the following statements is false? [A] Police power and year. [D] Same amount.
license fee are for purposes of regulation. [B] Any license fee 25. Which of the following has no power of taxation? [A] Provinces. [B]
should only raise an amount necessary to carry out regulation. [C] Cities. [C] Barangay. [D] Barrios.
The power to impose a license fee does not carry with it the power 26. A tax must be imposed for a public purpose. Which of the
to impose a tax. [D] A business or activity subject to a license fee following is not a public purpose? [A] Levy on the video industry.
does not become illegal because no license fee was paid for it. [B] Public education. [C] Improvement of the sugar industry. [D]
10. Which is not an essential characteristic of tax? [A] It is unlimited as None of the above.
to amount. [B] It is payable in money or property. [C] It is 27. The basic community tax of P5.00 of an individual is: [A] A personal
proportionate in character. [D] It is a regular payment. tax. [B] A direct tax. [B] A national tax. [D] An Ad Valorem Tax.
11. Which of the following is not correct? [A] Taxation exists 28. A tax on business is: [A] Direct tax. [B] Indirect tax. [C] Property tax.
inseparably with the state. [B] Taxation could not be exercised [D] None of the above.
without specific provision in the Constitution granting it. [C] 29. Which of the following statements underscores the fact on tax
Taxation could not be restricted by any Constitutional provision. reform at any given time? [A] Taxation is an inherent power of the
[D] Taxation is inherently legislative in nature and for public state. [B] Taxation is essentially a legislative power. [C] Taxation is a
purpose. power that is very broad. [D] The state can and should adopt
12. Revised Value-Added Tax is an example of: [A] Graduated Tax. [B] progressive taxation.
Progressive Tax. [C] Regressive Tax. [D] Proportional Tax. 30. A fundamental rule in taxation is that the property of one country
13. What constitutional provision is described when tax bill is required may not be taxed by another country. This is known as: [A]
to be presented for the approval of the executive branch of the International Law. [B] International Comity. [C] Reciprocity. [D]
government? [A] Legislative in nature. [B] Non-impairment Clause. International Inhibition.
[C] Due Process Clause. [D] Presidents power to veto.
14. Which of the following statements is most correct? Statement 1.
The power of taxation is inherent in sovereignty being essential to
the existence of every government. Hence, even if not mentioned
in the Constitution the state can still exercise the power. Statement
2. It is essentially a legislative function. Even if the absence of any
constitutional provision, taxation power falls to Congress as part of
the general power of law-making. [A] Statement 1 only. [B]
Statement 2 only. [C] Both statements. [D] None of the above.