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WorksheetsINCOME TAXATION
Total questions: 100
Worksheet time: 50mins
Taxation as distinguished from police power and power of eminent domain
Property is taken to promote the general welfare
Maybe exercised only by the government
Operates upon th
e whole citizenry.
There is generally no limit as to the amount that may be imposed.
The following are constitutional limitations, except
No imprisonment for non-payment of poll tax
Non-impairment of the obligation of contracts
Rule of
uniformity and equity in taxation
Exemption from income tax of charitable institutions, cemeteries, churches, personage
or convents appurtenant thereto, as well as all lands, buildings and improvements
actually, directly and exclusively used for religious, charitable and
educational purposes
Which of the following statements is correct?
The President is authorized to increase or decrease national internal revenue tax rates.
One of the nature of taxation is the reciprocal duties of protection and support between
the state and subjects thereof.
Every sovereign government has the inherent power to tax.
Income tax in an indirect tax
A tax must be imposed for public purpose. Which of the following is not a public purpose?
National defense
Public education
Improvement of the sugar and coconut industries.
Improvement of a subdivision road.
Which is not an essential characteristic of a tax?
It is unlimited as to amount.
It is payable in money.
It is proportionate in character.
It is an enforced contribution.
Special assessment is an enforced proportional contribution from owners of land especially benefited by public improvement. Which one of the following is not considered as one of its characteristics?
It is levied on land.
It is based on the government’s need of money to support its legitimate objectives.
It is not a personal liability of the persons assessed.
It is based solely on the benefit derived by the owners of the land.
It is the privilege of not being imposed a financial obligation to which others are subject.
Tax incentive
Tax exemption
Tax amnesty
Tax credit
As to scope of the legislative power to tax, which is not correct?
Where there are no constitutional restrictions, and provided the subjects are within the territorial jurisdiction of the state, Congress has unlimited discretion as to the persons, property or occupations to be taxed.
In the absence of any constitutional prohibition, Congress has the right to levy a tax of any amount it sees fit.
The discretion of Congress in imposing taxes extends to the mode, method or kind of tax, unless restricted by the constitution.
The sole arbiter of the purpose or which taxes shall be levied is Congress, provided the purpose is public and the courts may not review the levy of the tax to determine whether or not the purpose is public.
Which of the following is a nature of taxation?
The power is granted by legislative action.
It is essentially an administrative function.
It is generally payable in money.
Without it the state can continue to exist.
Which of the following is not a determinant of the place of taxation?
Source of the income
Citizenship of the taxpayer
Residence of the taxpayer
Amount of tax to be imposed
Which of the following statements is not correct?
An inherent limitation of taxation may be disregarded by the application of a constitutional limitation
The property of an educational institution operated by a religious order is exempt from property tax, but its income is subject to income tax.
The prohibition of delegation by the state of the power of taxation will still allow the BIR to modify the rules in time for filing of returns and payment of taxes.
The power of taxation is shared by the legislative and executive departments of the government.
Statement 1 – The point on which tax is originally imposed is impact of taxation.
Statement 2 – Eminent domain is inferior to non-impairment clause of the constitution.
Statement 3 – As a rule, taxes are subject to set-off or compensation.
Statement 4 – As a rule, provisions on the validity of tax exemptions are resolved liberally
in favor of the taxpayer.
Statement 1 Statement 2 Statement 3 Statement 4
True False
False True
False True True False
True True False False
False False True True
A tax system where the revenues are supplied mostly by indirect taxes
Schedular
Proportional
Progressive
Regressive
A tax system where the greater bulk of the tax revenues is derived by direct taxes.
Schedular
Proportional
Progressive
Regressive
This is an inherent limitation on the power of taxation.
Rule on uniformity and equity in taxation.
Due process of law and equal protection of the laws.
Non-impairment of the jurisdiction of the Supreme Court in tax cases
Tax must be for the public purpose.
This is a constitutional limitation on the power of taxation.
Tax laws must be applied within the territorial jurisdiction of the state.
Exemption of government agencies and instrumentalities from taxation.
No appropriation of public money for religious purposes
Power to tax cannot be delegated to private persons or entities.
They exist independent of the constitution being fundamental powers of the state, except
Power of taxation
Police power
Power of imminent domain
Power of recall
The power to acquire private property upon payment of just compensation for public purpose
Power of taxation
Police power
Power of imminent domain
Power of recall
The power to regulate liberty and property to promote the general welfare.
Power of taxation
Police power
Power of imminent domain
Power of recall
The power to demand proportionate contributions from persons and property to defray the expenses of the government.
Power of taxation
Police power
Power of imminent domain
Power of recall
Basic Principles of a sound tax system, except
Fiscal adequacy
Equality or theoretical justice
Administrative feasibility
Intellectual sensitivity
The tax imposed should be proportionate to the taxpayer’s ability to pay.
Fiscal adequacy
Equality or theoretical justice
Administrative feasibility
Intellectual sensitivity
The sources of revenue as a whole, should be sufficient to meet the demands of public expenditures.
Fiscal adequacy
Equality or theoretical justice
Administrative feasibility
Intellectual sensitivity
The tax laws must be capable of convenient, just and effective administration.
Fiscal adequacy
Equality or theoretical justice
Administrative feasibility
Intellectual sensitivity
Persons or things belonging to the same class shall be taxed at the same rate.
Simplicity in taxation
Reciprocity in taxation
Equality in taxation
Uniformity in taxation
The tax should be proportional to the relative value of the property to be taxed.
Simplicity in taxation
Reciprocity in taxation
Equality in taxation
Uniformity in taxation
The following are the nature of taxation, except
Inherent in sovereignty
Essentially legislative in character
Subject to inherent and constitutional limitation
Subject to approval by the people.
It literally means “place of taxation”; the country that has the power and jurisdiction to levy and collect the tax.
Basis of taxation
Situs of taxation
Scope of taxation
Theory of taxation
The existence of the government is a necessity and that the state has the right to compel all individuals and property within its limits to contribute
Basis of taxation
Situs of taxation
Scope of taxation
Theory of taxation
The reciprocal duties of support and protection between the people and the government.
Basis of taxation
Situs of taxation
Scope of taxation
Theory of taxation
Subject to inherent and constitutional limitations, the power of taxation is regarded as supreme, plenary, unlimited and comprehensive.
Basis of taxation
Situs of taxation
Scope of taxation
Theory of taxation
Our National Internal Revenue Laws are
Political in nature
Penal in nature
Criminal in nature
Civil in nature
The levying or imposition of tax and the collection of the tax are processes which constitute
the taxation system.
Basis of taxation
Aspects of taxation
Nature of taxation
Theory of taxation
The process or means by which the sovereign, through its law-making body raises income to defray the expenses of the government.
Toll
License fee
Taxation
Assessment
Enforced proportional contributions from persons and property levied by the state by virtue of its sovereignty for the support of the government and for all public needs.
Toll
License fee
Taxes
Assessment
An escape from taxation where the tax burden is transferred by the one on whom the tax is
imposed or assessed to another.
Shifting
Exemption
Transformation
Capitalization
An escape from taxation where the producer or manufacturer pays the tax and endeavors to recoup himself by improving his process of production thereby turning out his units of products at a lower cost.
Shifting
Exemption
Transformation
Capitalization
An escape from taxation where there is a reduction in the price of the taxed object equal to the capitalized value of future taxes which the taxpayer expects to be called upon to pay.
Shifting
Exemption
Transformation
Capitalization
The use of illegal or fraudulent means to avoid or defeat the payment of tax.
Exemption
Shifting
Avoidance
Evasion
The use of legal or permissible means to minimize or avoid taxes.
Exemption
Shifting
Avoidance
Evasion
Synonymous to tax evasion.
Tax dodging
Tax minimization
Tax exemption
Tax evasion
Synonymous to tax avoidance.
Tax dodging
Tax minimization
Tax exemption
Tax evasion
In every case of doubt, tax statutes are construed
Strictly against the government and the taxpayer.
Liberally in favor of the government and the taxpayer.
Strictly against the government and liberally in favor of the taxpayer.
Liberally in favor of the government and strictly against the taxpayer.
In every case of doubt, tax exemptions are construed
Strictly against the government and the taxpayer
Liberally in favor of the government and the taxpayer.
Strictly against the government and liberally in favor of the taxpayer.
Liberally in favor of the government and strictly against the taxpayer.
In case of conflict between the Tax Code and the Philippine Accounting Standards (PAS).
PAS shall prevail over the Tax Code.
Tax Code shall prevail over PAS.
PAS and Tax Code shall be both disregarded.
The taxpayer may choose between the PAS or the Tax Code.
Tax of a fixed amount imposed upon all persons residing within a specified territory without regard to their property or occupation they may be engaged.
Personal, poll or capitation
Property
Excise
Regressive
Tax imposed on personal or real property in proportion to its value or on some other
reasonable method of apportionment.
Personal, poll or capitation
Property
Excise
Regressive
Tax imposed upon performance of an act, the enjoyment of privilege or the engaging in an occupation.
Personal, poll or capitation
Property
Excise
Regressive
Tax which is demanded from the person whom the law intends or desires to pay it.
Direct
Indirect
Excise
Percentage
Tax which is demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another.
Direct
Indirect
Excise
Percentage
Tax which imposes a specific sum by the head or number or by some standard of weight or measurement and which requires no assessment other than a listing or classification of the objects to be taxed.
Specific
Ad-valorem
Excise
Income
Tax of a fixed proportion of the amount or value of the property with respect to which the tax is assessed.
Specific
Ad-valorem
Excise
Percentage
Tax based on a fixed percentage of the amount of property, income or other basis to be taxed.
Proportional
Progressive
Regressive
Indirect
Tax where the rate decreases as the tax base increases.
Proportional
Progressive
Regressive
Indirect
Tax where the rate increases as the tax base increases.
Proportional
Progressive
Regressive
Indirect
Which of the following statements is not correct?
Tax burdens shall neither be imposed nor presumed to be imposed beyond what the statute expressly and clearly states because tax statutes should be construed strictly against the government.
Tax exemptions, tax amnesty tax condonations and their equivalent provisions are not presumed and, when granted are strictly construed against the taxpayer because such provisions are highly disfavored by the government.
Exemptions from taxation are highly disfavored in law and he who claims tax exemption must be able to justify his claim or right.
The House of Representatives has the duty and the exclusive power of constructing and interpreting tax laws.
The strongest of all inherent powers of the state because without it, the government can
neither survive nor dispense any of its other powers and functions effectively.
Police Power
Power of Eminent Domain
Power of Taxation
Power of Recall
This power is superior to the non-impairment clause and is broader in application because it is a power to make and implement laws.
Power of Taxation
Power of Recall
Power of Eminent Domain
Police Power
Which of the following statements is not correct?
An inherent limitation of taxation may be disregarded by the application of a constitutional limitation.
Income tax liabilities shall be paid by the inhabitants even if foreign invaders occupy our country.
Taxes may be imposed retroactively by law, but unless so expressed by such law, these taxes must only be imposed prospectively.
Tax laws are either political or penal in nature.
Which of the following is not a constitutional limitation on the Power of Taxation?
No person shall be deprived of life , liberty or property without due process of law
No person shall be denied the equal protection of the law.
No person shall be imprisoned for debt or non-payment of tax.
No law granting any tax exemption shall be passed without the concurrence of a
majority of all the members of Congress.
The distinction of a tax from permit or license fee is that a tax is:
Imposed for regulation.
One which involves an exercise of police power.
One in which there is generally no limit on the amount that maybe imposed.
Limited to the cost of regulation.
Police power as distinguished from the power of eminent domain:
Just compensation is received by the owner of the property.
Maybe exercised by private individuals.
May regulate both liberty and property.
Property is taken by the government for public purpose.
A tax wherein both the incidence of or the liability for the payment of the tax as well as the burden of the tax falls on the same person.
Direct tax
Value added tax
Indirect tax
Percentage tax
Which one of the following is not a characteristic or element of a tax?
It is an enforced contribution.
It is legislative in character.
It is based on the ability to pay.
It is payable in money or in kind.
Tax as distinguished from license fees:
Limited to cover cost of regulation.
A regulatory measure.
Non-payment does not necessarily render the business illegal.
Imposed in the exercise of police power.
The power of taxation is exercised by
The President
The Supreme Court
Bureau of Internal Revenue
Congress
One of the characteristics of internal revenue laws is that they are:
Criminal in nature
Penal in nature
Political in nature
Generally prospective in application.
Which of the following is not an example of excise tax:
Transfer tax
Sales tax
Real property tax
Income tax
The following are similarities of the inherent power of taxation, eminent domain, and police power, except one:
Are necessary attributes of sovereignty
Superior to the non-impairment clause of the constitution.
Compensation is received.
Are legislative in character.
Which of the following is not a scheme of shifting the incidence of taxation?
The manufacturer transfers the tax to the consumer by adding the tax to the selling price of the goods sold;
The purchaser asks for a discount or refuse to buy at regular prices unless it is reduced
by the amount equal to the tax he will pay;
Changing the terms of the sale like FOB shipping point in the Philippines to FOB destination abroad, so that the title passes abroad instead of in the Philippines;
The manufacturer transfers the sales tax to the distributor, then in turn to the wholesaler, in turn to the retailer and finally to the consumer.
Which of the following statements is not correct?
Taxes may be imposed to raise revenues or to provide disincentives to certain activities within the state;
The state can have the power of taxation even if the Constitution does not expressly give it the power to tax.
For the exercise of the power of taxation, the state can tax anything at any time.
The provisions of taxation in the Philippine Constitution are grants of power and not limitations on taxing powers.
License fee as distinguished from tax:
Non-payment does not necessary render the business illegal.
A revenue raising measure
Imposed in the exercise of taxing power.
Limited to cover cost of regulation.
Value-added tax is an example of:
Graduated tax
Progressive tax
Regressive tax
Proportional tax
Which tax principle is described in the statement “ the more income earned by the taxpayer, the more tax he has to pay.”
Fiscal Adequacy
Theoretical justice
Administrative feasibility
Inherent in sovereignty
The most superior and least limitable among the fundamental powers of the state:
Power of recall
Police power
Power of taxation
Power of eminent domain
One of the characteristics of a tax is that:
It is generally based on contact.
It is generally payable in money.
It is generally assignable.
It is generally subject to compensation.
The following are the characteristics of our internal revenue laws except:
Political in nature.
Civil in nature.
Generally prospective in application.
May operate retrospectively if congress so provides.
Which of the following has no power of taxation?
Provinces
Cities
Barangays
Barrios
Which of the following statements is wrong? A revenue bill:
Must originate from the House of Representatives and on which same bill the Senate may propose amendments.
May originate from the Senate and on which same bill the House of Representatives may propose amendments.
may have a House version and a Senate version approved separately, and then consolidated, with both houses approving the consolidation version.
May be recommended by the President to Congress.
Tax as distinguished from special assessment:
not as a personal liability of the person assessed.
based wholly on benefits
exceptional as to time and place
based on necessity and is to raise revenues
Under this basic principle of a sound tax system, the Government should not incur a deficit:
Theoretical justice
Administrative feasibility
Fiscal Adequacy
Uniformity in taxation
Which of the following may not raise money for the government?
Power of taxation
Police power
Eminent Domain
License fee
No person shall be imprisoned for non-payment of this:
Excise tax
Value added tax
Income tax
Poll tax
This is a demand of ownership:
License fee
Tax
Toll
Customs duties
Income tax is generally regarded as
an excise tax
a tax on persons
a property tax
tax on profits
Which of the following is not acceptable for legally refusing to pay the tax?
That the right of the state to collect the tax has prescribed.
That there is no jurisdiction to collect the tax.
That the tax law was declared as unconstitutional.
That there is no benefit derived from the tax.
It is important to know the source of income for income tax purposes, i.e. from within or without the Philippines because
The Philippines imposes income tax on income from sources within and without of a non-resident citizen.
Some individual taxpayers are citizens while others are aliens.
Separate graduated rates are imposed on different types of income.
Some taxpayers are taxed on their worldwide income while others are taxable only upon income from sources within the Phils.
A law granting tax exemption requires the concurrence of
Majority vote of members of congress
2/3 vote of members of Congress.
3/4 vote of members of Congress.
Unanimous vote of members of Congress.
No person shall be imprisoned for debt or non-payment of poll tax. This is a(an)
Inherent limitation
Constitutional limitation
International limitation
Territorial limitation
The Department of Finance thru its officers entered into a contract with foreign investors granting them exemption from all forms of taxes to encourage investments in the Phils. The contract is
Void, unless the President ratifies
Void, because the power to grant tax exemption is vested in Congress.
Valid, if the President has authorized the officers to enter into such contract.
Valid, because the purpose is to promote public welfare.
Tax as distinguished from debt
no imprisonment for non-payment
may be paid in kind
based on contract
based on law
Congress can impose a tax at any amount and at anytime shows that
Taxation is an inherent power of the state.
Taxation is essentially a legislative power.
Taxation is a very broad power of the state.
Taxation is based on taxpayers’ ability to pay.
The amount required is dictated by the needs of the government in:
License fee
Tax
Toll
Debts
A charge imposed on land for special benefits derived resulting from public improvements.
Tax
Toll
License
Special assessment
Which of the following are National Internal Revenue Taxes?
I. Income tax III. Donor’s tax V. Other percentage tax
II. Estate tax IV. Value Added tax VI. Excise Tax
VII. Documentary stamp tax
I, II, III, IV
I, II, III, IV, V
I, II, III, IV, V, VI
I, II, III, IV, V, VI, VII
The Bureau of Internal Revenue shall have a chief and four (4) assistant chiefs to be known as
Secretary and Assistant Secretaries
Secretary and Undersecretaries
Commissioner and Assistant Commissioners
Commissioners and Deputy Commissioners
The three fundamental powers of the state are
I. Inherent in the state and may be exercised by the state without need of any constitutional grant.
II. Not only necessary but indispensable.
True; true
True; false
False; true
False; false
The three fundamental powers of the state are
I. Methods by which the state interfere with private rights.
II Exercised primarily by the legislature.
True; True
True; false
False; true
False; false
I. Police power regulates both liberty and property while the power of eminent domain and the power of taxation affect only property rights.
II Police power and the power of taxation may be exercised only by the government while the power of eminent domain may be exercised by some private entities.
True; true
True; false
False; true
False; false
. I. The property taken in police power is destroyed while the property taken under the power
of eminent domain and power of taxation are not destroyed.
II. In power of taxation, the compensation received is the protection afforded to the
citizens; in police power the compensation received is the altruistic feeling that somehow you contributed to the promotion of the general welfare; in power of eminent domain, the compensation received is the just compensation paid for the property taken.
True; true
True; false
False; true
False; false
