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Worksheets1.1 General Principles
Total questions: 43
Worksheet time: 22mins
The primary purpose of taxation is
To enforce contribution from its subject for private purpose
To raise revenue for the government
To achieve economic and social stability
To regulate the conduct of business or profession
Select the incorrect statement
the power of eminent domain may be exercised by any private entity
by police power, the property taken is destroyed
by eminent domain, the property taken is preserved
eminent domain and taxation affects only property rights
What is the theory of taxation?
necessity
constitutionality
reciprocal duties of support and protection
public purpose
What is the basis of taxation?
constitutionality
public purpose
necessity
reciprocal duties of support and protection
The point in which tax is levied is called?
impact of taxation
situs of taxation
incidence of taxation
assessment
When the impact and incidence of taxation are merged into the statutory taxpayer, the tax is called?
personal tax
direct tax
indirect tax
national tax
Which of the following is an administrative act in taxation?
collection of taxes
fixing the rate of the tax
determination of the subject of the tax
determination of the purpose of the tax
I. Taxation is the rule; exception is the exemption.
II. Police power may be sued to implement the taxation power of the state.
I is true
II is true
I and II are true
I and II are not true
Which of the following depicts taxation being used to implement police power?
Oplan Kandado enforced against taxpayer not issuing BIR receipts
Prohibition of smuggling and the seizure of smuggled goods
Levy of exorbitant excise taxes on sin products
All of the above
Select the incorrect statement
the power to tax includes the power to exempt
exemption is construed against the taxpayer and in favor of the government
tax statutes are construed against the government in case of doubt
taxes should be collected only for public improvement
Which of the following is delegated?
Levy or imposition of tax by the national government
Assessment and collection of taxes by the national government
Levy or imposition of ordinances by the local government
Assessment and collection of local taxes by the local government
Businesses of the State should not be taxed under the inherent limitation as it will not yield additional revenue to the State but taxing private businesses to the exclusion of State businesses will violate the equality doctrine of the Constitution. Considering that taxes are essential to the government what must be done?
Exempt businesses owned by the State
Exempt both State and private businesses following the Constitutional limitations are superior to the Lifeblood Doctrine
Tax both State and private businesses. The inherent limitations may be disregarded by applying the constitutional limitations.
None of these
Which of the following is violative of the principle of non-delegation?
Requiring that legislative enactment must exclusively pertain to Congress
Authorizing the President to fix the amount of impost on imported and exported commodities
Authorizing certain private corporation to collect taxes
Allowing the Secretary of Finance and the BIR to issue regulations or rulings which go beyond the scope of a tax law.
Which of the following violates Constitutional provisions?
Payment of salaries to priests or religious ministers employed by the Armed Forces of the Phillippines
Imposing tax on properties of religious institutions which are not directly and exclusively used for religious purposes
Imposition of license for the sale of religious literature
Authorizing the President of the Philippines to fix the rates of tariffs or imports
Concerned with increasing unemployment rates in the country, the President of the Philippines encouraged the Philippine Senate to pass a law granting special tax privileges to foreign investors who will establish businesses in the country. The Senate accordingly drafted the bill and passed to Congress for approval.
Is this valid exercise of taxation power?
Yes. It is the discretion of the President to adopt any mesures he deemed necessary to alleviate poor conditions in the country.
Yes. Any means beneficial to the public interest should be given optimum priority.
Yes. The President's proposal will have to be finally approved and passed by the legislature. The rule on non-delegation of taxation would not be violated.
No. Tax bills shall originate from the House of Representatives
Ram is the only practicing lung transplant specialist in Baguio City. The City Government of Baguio passed a local ordinance subjecting the practice of lung transplant to 2% tax based on receipts. ram objected claiming that other transplant specialist in other regions of the country are not subjected to tax.
Is Ram's contention valid?
Yes, because the rule of taxation should be uniform and equitably enforced.
Yes, because Ram is the only one subject. Other practitioners who would later practice would not be covered by the ordinance.
No, because the ordinance would cover all transplant specialist who would practice in Baguio City. The uniformity rule would not be violated.
No, becasue subjecting the new industry to taxation would hamper economic growth.
With the country under incessant shortage of sugar, the Philippine Congress enacted a law providing tax exemptions and incentives to cane farmers without at the same time granting tax exemptions to rice farmers who produce the staple food of the Philippines. Is the new law valid?
Yes, since there is valid classification of the tax payers who would be exempted from tax.
Yes, since sugar is more important than rice.
No, since the grant of exemption is construed in favor of taxpayers.
No, because there is no uniformity in the grant of tax exemption.
Congress passed a law subjecting GOCCs to income tax. Is the law valid?
Yes, because all government agencies and instrumentalities are subject to tax.
Yes, because GOCCs are not government agencies and are essentially commercial in nature.
No, becasue government agencies are exempt. This would pose a violation of the equality clause in the constitution.
No, because GOCCs are constitutionally exempted from paying taxes.
An educational institution operated by a religious organization was being required by a local government to pay real property tax. Is the assessment valid?
Yes, with respect to all properties held by such educational institution.
Yes, with respect to properties not actually devoted to educational purposes.
No, with respect to any properties held by such educational institution.
No, with respect to properties not actually devoted to educational purposes.
Requiring non-resident aliens residing outside the country to file tax returns here in the Philippines would more likely result in
violation of constitutional limitation
violation of inherent limitation
violation of both inherent and constitutional limitation
no violation
The Japanese government invested P100,000,000 in a domestic bank and earned P10,000,000 interest. Which is correct?
The income is exempt on grounds of territoriality.
The income is exempt due to international comity.
The income is subject to tax on the basis of sovereignty.
The income is subject to tax because the income is earned within the Philippines.
There is a proposal to levy tax upon texting. If there are 400 representatives and 260 attended the deliberation for approval of the tax bill, how many dissenting vote is required to kill the bill?
260
231
230
201
The City of Manila, claiming that it can impose taxes under the Local Government Code, imposed a tax on banks (in addition to percentage tax on banks imposed in the National Internal Revenue Code). The banks within the City of Manila, objected for the various reasons given below. Which would justify the objection of the banks?
Uniformity in taxation
The rule of double taxation
The power of taxation cannot be delegated
None of these
Some franchise holders who are paying the franchise tax are being required by an amendatory law to pay the value-added tax, while other remain subject to franchise tax. Which of the following provisions makes the law unconstitutional?
No law shall be passed impairing the obligations of contract
The rule of taxation shall be uniform
No person shall be deprived of property without due process of law
None of the above
All forms of tax exemptions can be revoked except tax exemption based on
I. Constitution
II. Contract
III. Law
I only
II only
I and II only
I, II and III
The test of exemption of real properties owned by religious or charitable entities from real property taxes is
Usage
Ownership
Location
Either ownership or location
Which of the following tax privileges can be withdrawn?
Income tax exemption of non-profit educational institution
Real property tax exemption of religious, charitable and educational entities
Taxpayer's right to due process and equal protectin
Tax exemption granted by law
Which of the following is not legally tenable in refusing to pay a tax imposition?
Violation of taxpayer's right to due process of law.
The taxing authority has not tax jurisdiction.
The prescriptive period of assessment has elapsed.
That there is no benefit that can be derived from the tax.
A law was passed by Congress which granted tax amnesty to those who have not paid income tax for a certain year without at the same time providing for the refund of taxes to those who have already paid them. The law is:
Valid becasue there is a valid classification.
Not valid because those who did not pay their taxes are favored over those who have paid their taxes.
Valid becasue it was Congress who passed the law and it did not improperly delegare the power to tax.
Not valid because only the President with the approval of Congress may grant amnesty.
Which is not an element of double taxation?
Taxing authority
Tax period
Tax type
Tax rates
Which is not an instance of a double taxation?
Taxes by the national government on business where one is based on sales and the other on the income for such sales.
A tax imposed upon fishing and fishpond operations.
Business taxes imposed by the national government and local government.
None of these.
Who is not subject to Philippine personal tax?
Resident alien
Resident citizen
Non-resident citizen
None of these
A resident citizen had the following business sales during the month:
Compute the income subject to tax.
P3,500,000
P1,200,000
P2,000,000
P800,000
What is the amount subject to Philippine business tax?
P3,500,000
P2,000,000
P1,500,000
P0
A resident citizen had the following properties. What is the amount subject to Philippine property tax?
P3,500,000
P2,000,000
P1,500,000
P0
Mr. Kang, an Indonesian national, sold to his OFW friend in Indonesia his car which they agreed to be delivered to the Philippines within 30 days after import documentation are cpmpleted. Mr. Kang realized a P300,000 income on the sale. Which is correct?
The gain is subject to Philippine income tax since the goods are delivered in the Philippines.
The gain is not subject to Philippine income tax since the income is earned outside the Philippines.
The gain is subject to Philippine income tax since the sale is made to a Filipino.
The gain is not subject to income tax since the seller is an alien who is not subject to Philippine tax.
A seller sold a piece of land to a buyer who agreed to pay P4,000,000. The sale is subject to a capital gains tax based on the selling price. In order of the seller to reduce his taxes, they executed a deed of sale which indicated a selling price of P1,000,000. This is an example of
Tax minimization
Tax evasion
Tax loophole
Tax arbitrage
Aldo has a property worth P1,000,000 which he intends to transfer to his son. Considering that disposal by sale would be subject to capital gains tax of 6%. Aldo decided to donate the property in four parts of P250,000 over four years. This is an example of
Tax minimization
Tax evasion
Tax loophole
Tax arbitrage
Claiming input VAT on personal transactions as credit against output VAT on sales in the course of business is an example of
Tax minimization
Tax evasion
Tax loophole
Tax arbitrage
A taxpayer had a family home worth P15M which he intends to transfer to his only son. Which of the following mode of transfer results in optimum tax minimization?
Transfer mortis causa
Transfer inter-vivos
Sale transaction
Sale for insufficient consideration
Which of the following forms of escapes will more likely to result in loss of revenue to the government?
Shifting
Capitalization
Transformation
Tax exemption
Tax minimization cannot be achieved by
Tax planning
Selection of transaction
Maximization of tax credits and loss caryy-overs
Offsetting of losses and income of subsidiaries
Which of the following tax saving practices could result in a BIR assessment?
Practicing tax avoidance
Maximizing tax incentives
Engaging in tax dodging schemes
Entering into compromise with the government
