TRUE FALSE

1. One of the essential characteristics

of a tax is that it is an enforced
contribution.
Essential Characteristics of
a Tax
i. It is an enforced contribution.
ii. It is levied by the lawmaking body.
iii. It is proportionate in character.
iv. It is generally payable in money.
v. It is imposed for the purpose of
raising revenues.
vi. It is to be used for public purpose.
 TRUE FALSE
2. Real estate tax is a national tax.
 Classification of Taxes
As to authority imposing the tax or
scope
a. National: Tax imposed by the national
government.
o Examples: Internal Revenue Taxes, Tariff
and Customs duties
b. Municipal or Local: Tax imposed by the
municipal government for specific
needs.
o Examples: Real Estate Taxes, Municipal
Licenses
 TRUE FALSE
3. There are two kinds of double
taxation
- evasion and avoidance
 Double Taxation
Direct Double Taxation
Indirect Double Taxation
 Direct Double Taxation
Direct Double Taxation [same subject is
taxed twice when it should only by taxed
once]
Both taxes are imposed
a. For the same purpose
b. By the same taxing authority
c. Within the same jurisdiction
d. For the same taxable period
e. For the same kind of tax
 Indirect Double Taxation
Indirect Double Taxation [not unconstitutional but is avoided so as not
to bring injustice to the taxpayer]

Examples:
a. Business Tax is imposed by the municipal government
prior to the issuance of a business license. Later, his
income will be subject to income tax by the national
government.
b. An item of income which is subject to tax in the
Philippines and the same item is taxed in another
country.
o Methods: 1) Allowing for reciprocal exemptions; 2)
Allowance of tax credit for foreign taxes paid; 3) Allowance
of deduction for foreign taxes paid; 4) reduction of the
Philippine tax rate.
 Escape from Taxation
Tax Avoidance [tax minimization, tax
planning]: taxpayer minimizes his tax
liability by taking advantage of legally
available tax planning opportunities.
Tax Evasion [tax dodging]: occurs when
the taxpayer resorts to unlawful
means to lessen or to get away with
his tax liability.
 TRUE FALSE
4. Donors tax is a direct tax.
 Classification of Taxes
As to who bears the burden
a. Direct: Tax demanded from persons
who are intended or bound by law to
pay the tax.
o Examples: Community Tax, Income Tax,
Estate Tax
b. Indirect: Tax which the taxpayer can
shift the burden to another.
o Examples: Customs Duties, Value-added
Taxes, some percentage taxes
 TRUE FALSE
5. Indirect double taxation is
unconstitutional.
 Direct Double Taxation
Direct Double Taxation [same subject is
taxed twice when it should only by taxed
once]
Both taxes are imposed
a. For the same purpose
b. By the same taxing authority
c. Within the same jurisdiction
d. For the same taxable period
e. For the same kind of tax
 Indirect Double Taxation
Indirect Double Taxation [not unconstitutional but is avoided so as not
to bring injustice to the taxpayer]

Examples:
a. Business Tax is imposed by the municipal government
prior to the issuance of a business license. Later, his
income will be subject to income tax by the national
government.
b. An item of income which is subject to tax in the
Philippines and the same item is taxed in another
country.
o Methods: 1) Allowing for reciprocal exemptions; 2)
Allowance of tax credit for foreign taxes paid; 3) Allowance
of deduction for foreign taxes paid; 4) reduction of the
Philippine tax rate.
 TRUE FALSE
6. Income Tax is an ad valorem tax.
 Ad Valorem Tax
Tax of a fixed proportion of the value
of property;
Needs an independent appraiser to
determine the value.
o Examples: Real Estate Tax, Certain customs
duties, Excise Taxes on cigarettes, gasoline and
others.
 TRUE FALSE
7. Even in the absence of any
constitutional provision, taxation
power falls under Congress as part of
the general power of lawmaking.
 Taxation
Taxation is the process or means by
which the sovereign, through its
lawmaking body, raises income to
defray the necessary expenses of the
government.
Taxation, as a power of the State, is
inherent in sovereignty.
 Aspects of Taxation
Levying of the Tax. Imposition of tax
is a legislative function It is
Congress that levies taxes.
Collection of Tax. This is an
administrative function.
 TRUE FALSE
8. Community tax is a poll tax.
Personal, Poll or Capitation
Tax of a fixed amount imposed on
individuals, whether citizens or not,
residing within a specified territory
without regard to their property or
the occupation in which they may be
engaged.
Example: Community Tax
 TRUE FALSE
9. In a gratuitous transfer of property,
situs is the taxpayers residence,
citizenship or location of the
property.
 Situs of Taxation
Place of Taxation.
The situs of taxation is determined by a
number of factors.
i. Subject Matter
ii. Nature of Tax
iii. Citizenship of Taxpayer
iv. Residence of Taxpayer
Gratuitous transfer of property:
Taxpayers residence or citizenship, or
location of the property.
 TRUE FALSE
10. Income tax is an excise tax.
 Income Tax
Tax on all yearly profits arising from
property, profession, trade or
business, or is a tax on a persons
income, emoluments, profits and the
like.
Income Tax is generally regarded as
an excise (privilege) tax. It is levied
upon the right of a person to receive
income or profits.
 TRUE FALSE
11. In the case of intangible personal
property, as a rule, situs is the
domicile of the owner even if he has
acquired a situs in another place.
 Situs of Taxation
Place of Taxation.
The situs of taxation is determined by a
number of factors.
i. Subject Matter
ii. Nature of Tax
iii. Citizenship of Taxpayer
iv. Residence of Taxpayer
Intangible personal property: As a rule,
situs is the domicile of the owner UNLESS
he has acquired a situs elsewhere.
 TRUE FALSE
12. Taxes on distilled spirits, fermented
liquors and the like are specific taxes.
 Classification of Taxes
As to determination of Amount
a. Specific: Tax imposed based on a
physical unit of measurement, as by
head or number, weight, or length or
volume.
o Examples: Tax on Distilled spirits,
fermented liquors, cigars, wines, fireworks,
etc.
b. Ad Valorem: Tax of a fixed proportion of
the value of property.
o Examples: Real Estate Tax, Certain
customs duties, Excise Taxes on cigarettes,
 TRUE FALSE
13. The power of taxation is inherent in
sovereignty.
 Taxation
Taxation is the process or means by
which the sovereign, through its
lawmaking body, raises income to
defray the necessary expenses of the
government.
Taxation, as a power of the State, is
inherent in sovereignty.
 TRUE FALSE
14. In determining the situs of
taxation, the nature of tax is not to
be considered at all.
 Situs of Taxation
Place of Taxation.
The situs of taxation is determined
by a number of factors.
i. Subject Matter
ii. Nature of Tax
iii. Citizenship of Taxpayer
iv. Residence of Taxpayer
 TRUE FALSE
15. The levying of tax is essentially an
administrative function.
 Aspects of Taxation
Levying of the Tax. Imposition of tax
is a legislative function It is
Congress that levies taxes.
Collection of Tax. This is an
administrative function.