1.

What is the primary purpose of taxation

THE PRIMARY PURPOSE OF TAXATION on the part of the government is to provide funds or
property with which to promote the general welfare and protection of its citizens.

2. What is the benefit derived by a taxpayer from taxation?

In return for the Taxpayer’s contribution, he receives the general advantages and protection
which the government affords the taxpayer and his property. Support for protection. The only benefit to
which a taxpayer is entitled is that derived from his enjoyment of the privileges of living in an organized
society safeguarded and established by the devotion of taxes to public purposes.

3. What are the basic principles of a sound tax system (4). Explain the concepts of fiscal adequacy and
administrative feasibility.

Fiscal Adequacy

This requires that sources of government funds must be sufficient to cover government cost.
Taxes should increase in response to increase in government spending. In other words, the
government should collect the right amount of taxes to be used in its day to day operations.

Theoretical Justice

This principle states that taxation should consider the taxpayer’s ability to pay. Taxes should not
be oppressive, unjust or confiscatory. As the old saying goes, you should not kill the hen that lays
the golden egg. Using the progressive tax system is a way of following theoretical justice.

Administrative Feasibility

Tax laws should be capable of efficient and effective administration to encourage compliance.
Easy for taxpayers to comply, avoids administrative bottlenecks and reducing compliance cost.
Using the EFPS provided by the BIR is a way of further improving administrative feasibility.

4. What are the inherent limitations on the power of taxation? Name 2, explain citing the applicable
Constitutional provision or jurisprudence.

5. Explain the “rational basis” test?

6. How are taxes classified as to:

a. Scope

b. Purpose

c. Subject
 d. As to who bears the burden

e. As to rate

7. What is the nature of tax laws?

8. Distinguish tax vs debt: as to basis, mode of payment, prescription, assignability, criminal

penalty/imprisonment.

9. Explain the “doctrine of equitable recoupment”. Is the doctrine applicable under Philippine law?

10. What are the exceptions to the rule on non-delegation of the power to tax

11. Why was the use of public funds in the case of Aglipay versus Ruiz not considered violative of the non-
establishment of religion clause?

12. Distinguish between the tax exemption enjoyed by non-stock non-profit charitable and religious
institutions, and the exemption enjoyed by non-stock non-profit educational institutions.

13. Distinguish between the taxation of non-stock non-profit educational institutions, and of proprietary
educational institutions.

14. What are the sources of taxation law.

15. How should tax laws be construed? How should tax laws granting exemption be construed?

16. Explain the concept of “legislative approval through re-enactment.”

17. Discuss the concept of “double taxation”. Is double taxation prohibited by the Constitution?

18. Distinguish between “tax credit” and “item of deduction”.

19. Distinguish between “tax treaty relief” and “tax sparing”.

20. Explain the rule that tax laws should emanate from the Lower House.