True Statements
Our national internal revenue laws are civil in
 As a rule, provisions on the validity of tax
exemptions are resolved liberally in a favor of the
government.
 Taxes may be imposed retroactively y law, but
unless so expressed by such law, these taxes must
only imposed prospectively.
 Administrative feasibility means that tax laws must
be easy to understand and capable of being
enforced.
False Statements:
 As a rule, taxes are subject to set-off or
compensation.
 The President is authorized to increase or decrease
national internal revenue taxes.
 The Bureau of Internal Revenue has the duty and
exclusive power or enacting, implementing and
interpreting tax laws.
 Tax laws are either political or penal in nature.
 Tax avoidance is an act of using pretenses and
forbidden devices in order to lessen tax liability.
 Failure to pay taxes will render the business or
occupation illegal.
 Every Filipino citizen is taxable on all income derived
from sources within and outside of the Philippines.
Identification:
1. It is an inherent limitation on the power of taxation
a. Rule on uniformity and equity of taxation –
constitutional limitation
b. Due process of law and equal protection of the
laws – constitutional limitation
c. Non-impairment of the jurisdiction of the
Supreme court in tax cases – constitutional
limitation
d. Tax must be for public purposes.
2. They exist independent of the constitution being a
fundamental power of the state, EXCEPT
a. Power of taxation
b. Police Power
c. Power of eminent domain
d. People Power
3. Basic Principles of a sound system, EXCEPT
a. Fiscal Adequacy
b. Administrative feasibility
c. Theoretical justice
d. Intellectual sensitivity
4.
nature.
5. The principal purpose of taxation is to raise
revenues for government needs.
6. Persons or things belonging to the same class shall
be taxed at the same rate. -?
a. Simplicity in Taxation
b. Reciprocity of taxation
c. Uniformity of Taxation
7. The tax should be proportional to the relative value
of the property to be taxed. -?
a. Simplicity of Taxation
b. Equality in taxation
c. C. Uniformity in Taxation
8. The following are nature of taxation, EXCEPT.
a. Inherent in sovereignty
b. Essentially legislative in character
c. Subject to inherent and constitutional
limitations.
d. Subject to approval by the people
9. This is a constitutional limitation on the power of
taxation
a. Tax laws must be applied within the territorial
jurisdiction of the state.
b. Exemption of government agencies and
instrumentalities from taxation.
c. No appropriation of public money for religious
purposes.
d. Power to tax cannot be delegated to private
person or entities.
10. Theoretical Justice – The tax imposed should be
appropriate to the taxpayer’s ability to pay.
11. Taxation as distinguished from police power and
eminent domain
a. Property is taken to promote general welfare. –
police power (taken or destroyed) eminent
domain (private property taken for public use)
b. Maybe exercised only by the government. –
taxation and police power
c. Operates upon the whole citizenry – taxation
and police power
d. There is generally no limit as to the amount that
may be imposed.
12. Situs of Taxation – It literally means “place of
taxation”, the country that has the power and
jurisdiction to levy and collect the tax.
13. Which of the following is not a public purpose?
a. National Defense
b. Public education
c. Improvement of the sugar and coconut industries
 d. Improvement of subdivision road. d. Exhibition of certificate of payment at the place
14. Which is not an essential characteristic of a tax? of business.
a. It is unlimited in amount 5. Services under the BIR senior deputy commissioner
b. It is payable in money a. .
c. It is proportionate in character b. .
d. It is an enforced contribution c. .
15. Police Power – The power to regulate liberty and 6. Powers of the BIR Commissioner of Internal
property to promote the general welfare. Revenue
16. Fiscal Adequacy – The sources of revenue, as a a. The power to interpret tax laws and decide
whole, should be sufficient to meet the demands of disputed tax assessments
public expenditure. b. Summon and obtain information or testimony
17. Tax exemption – It is the privilege of not being of persons
imposed a financial obligation to which others are c. Make assessments and prescribe additional tax
subject. requirements
18. Which of the following is not a determinant of the d. Compromise abate and refund or credit taxes
place of taxation? e. Suspend the business operations of a taxpayer.
a. Source of income f. .
b. Citizenship of taxpayer g. .
c. Residence of the taxpayer 7. Constitutional imitations of taxation
d. Amount of tax to be imposed a. Due process of law
19. An escape from taxation where the burden is b. Equal protection of laws
transferred by the one whom tax is assessed. c. Rule of uniformity and equity
d. Non-impairment of contracts
III. Enumeration e. Origination of appropriation, revenue and tariff
bills
1. Principles of a sound tax system f. President’s power to veto
a. Fiscal Adequacy g. No public money shall be appropriated for
b. Equality or Theoretical Justice religious purposes
c. Administrative Feasibility h. No imprisonment for nonpayment of poll tax
2. Groups under the BIR deputy commissioner 8. Objects of taxation
a. Operations Group a. Persons
b. Legal and Enforcement b. Properties
c. Information Systems Group c. Excise Objects
d. Resource Management Group 9. Purposes of Taxation
3. Inherent limitation of taxation a. Revenue Purpose
a. Taxes may be levied only for public purposes b. Regulatory Purpose
b. Tax legislation may not be delegated. c. Compensatory Purpose
c. Tax power is limited to territorial jurisdiction of
the State. IV. Taxable Income
d. Taxation is subject to international comity
e. Government entities are generally tax-exempt. 1. 13th month pay in excess of P82, 000.
4. Examples of administrative requirements of BIR 2. 10 days monetized sick leave credits of private
a. A person subject to any internal revenue tax employees.
shall register once with the appropriate revenue 3. Statutory minimum wage of minimum wage earner
office. who has other reportable income.
b. All persons who are engaged in business shall 4. Interest Income in bank deposit earned by duly
secure from the BIR an authority to print registered cooperative.
receipts or sales or commercial invoices before 5. Separation pay due to voluntary resignation.
6. Money acquired through illegal means
a printer can print the same.
7. Gains from the sale of bond with a maturity of 4 yrs.
c. Follow rules given when issuing receipts or sales
8. Professional athlete’s salary.
or commercial invoices (see pg. 87)
9. 14th month pay of P32, 000 to complete the 13 th
month pay and other benefits already received
amounting to P50, 000.
10. Board of Director’s fee.

V. Non- Taxable Income

1. Productivity incentive schemes arising from CBA,

P10, 000.
2. Overtime pay of a wage earner.
3. Amount Received in payment of moral damages due
to physical injuries.
4. Novel prize received due to civic achievement
contributions.
5. Income earned within the Philippines by the World
Bank.
6. P10, 000 productivity incentive bonus.
7. Annual clothing allowance of P5, 000.
8. Income of PAGCOR. – sabi sa book taxable daw wt
9. Group insurance benefits.