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INTRODUCTION TO TAXATION

AGARAP, Elyza Nicole MATIBAG, Kyle Camille


ATACADOR, Antonio Manuel PAGUNSAN, Kevin Michael
BATAC, Nichole Aurin RESURRECCION, Edizer
CAYABYAB, Angelo SUPENA, Rona Julymhel
CHUA, Catalina Faye SURBAN, Quendrick Keith
CIPRES, Lorenzo VERGARA, Anne Paulyne
CORPUZ, Kenneth YABYABIN, Yasmin Ysabel
EBETUER, Christian BSA 4-A

1. Which is an object of taxation?


a. Persons
b. Properties
c. Excise Objects
d. All of the Above

2. It is the power to enforce contribution to raise government funds:


a. Taxation
b. Police Power
c. Eminent Domain
d. None of the Above

3. Which of the following is NOT a form to tax avoidance which could be legally used by the taxpayer?
a. Tax Condonation
b. Tax Amnesty
c. Exemption
d. Tax Evasion

4. It is a form of escape from taxation by which a taxpayer uses illegal or unlawful means to defeat,
evade, or lessen the payment of tax:
a. Tax Avoidance
b. Tax Evasion
c. Tax Amnesty
d. Tax Condonation

5. Which of the following is an example of taxes collected by the National Government?


a. Community Tax
b. Municipal Licenses Taxes
c. Income Tax
d. Professional Tax
6. It refers to all funds or income derived by the government whether from tax or from other sources:
a. Penalty
b. Subsidy
c. Revenue
d. Debt

7. One of the characteristics of internal revenue laws is that they are:


a. Criminal in nature
b. Penal in nature
c. Political in nature
d. Generally prospective in application

8. In case of conflict between tax laws and generally accepted accounting principles (GAAP):
a. Both tax laws and GAAP shall be enforced
b. GAAP laws shall prevail over tax laws
c. Tax laws shall prevail over GAAP
d. The issue shall be resolved by the courts

9. The following are similarities of the inherent power of taxation, eminent domain, and police power,
EXCEPT one:
a. Are necessary attributes of sovereignty
b. Interfere with private rights and property
c. Affect all persons or the public
d. Are legislative in implementation

10. Tax as distinguished from license fee:


a. Non-payment does not necessarily render the business illegal
b. A regulatory measure
c. Imposed in the exercise of police power
d. Limited to cover cost of regulation

11. Which statement refers to police power as distinguished from taxation?


a. It can only be imposed on specific property or properties
b. The amount imposed depends on whether the activity is useful or not
c. It involves the taking of property by the government
d. The amount imposed has no limit

12. The distinction of a tax from permit or license fee is that a tax is:
a. Imposed for regulation
b. One which involves an exercise of police power
c. One which there is generally no limit on the amount that may be imposed
d. Answer not given
13. The following are taxation powers that cant be delegated to other branches EXCEPT:
a. Power to value property
b. Determining the place of tax imposition
c. Selecting the property to be taxed
d. Fixing the amount to be imposed

14. It is a form of tax avoidance by transferring tax burden to another:


a. Tax Amnesty
b. Tax Shifting
c. Tax Capitalization
d. Tax Transformation

15. Rate where the tax rate increases as the tax base increases:
a. Proportional Rate
b. Regressive Rate
c. Graduated Rate
d. Mixed Rate

16.Fee enforced to restrain and regulate business and occupation:


a. Tariff
b. Toll
c. Special Assessment
d. License Fee

17.Tax exemptions that are intentional/accidental or those not mentioned that is deemed exempted by
omission:
a. Contractual Exemption
b. Implied Exemption
c. Expressed Exemption
d. Non-Contractual Exemption

18.Which principle state that revenue should be sufficient to meet public expenditures regardless of
business conditions:
a. Equality
b. Theoretical Justice
c. Fiscal Adequacy
d. Feasibility
19. A resident citizen is taxable on all income derived from sources:
a. Within the Philippines only
b. Without the Philippines only
c. Partly within and partly without
d. Within and without the Philippines

20. A non-resident citizen is taxable on all income derived from sources:


a. Within the Philippines only
b. Without the Philippines only
c. Partly within and partly without
d. Within and without the Philippines

21. A resident alien is taxable on all income derived from sources:


a. Within the Philippines only
b. Without the Philippines only
c. Partly within and partly without
d. Within and without the Philippines

22.A non- resident alien is taxable on all income derived from sources:
a. Within the Philippines only
b. Without the Philippines only
c. Partly within and partly without
d. Within and without the Philippines

23. A citizen of the Philippines who works and derives income abroad is a resident citizen if he stayed
outside the Philippines:
a. For less than 180 days
b. For more than 180 days
c. For 183 days or more
d. For less than 183 days

24. A citizen of a foreign country is considered a non-resident alien engaged in business in the
Philippines if he stayed inside the Philippines:
a. For 183 days or more
b. For less than 183 days
c. For more than 180 days
d. For less than 180 days
25. Which is NOT an essential characteristic of Tax?
a. It is an enforced contribution
b. It is generally payable in money
c. It is proportionate in character
d. It is levied for private purpose

26. It is a tax imposed on the gains presumed to have been realized by the seller from the sale,
exchange, or other dispositions of capital assets:
a. Documentary Stamp Tax
b. Donor's Tax
c. Capital Gains Tax
d. Estate Tax

27. It is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and
the beneficiaries at the time of death and on certain transfers which are made by law as equivalent to
testamentary disposition:
a. Documentary Stamp Tax
b. Donor's Tax
c. Capital Gains Tax
d. Estate Tax

28. A tax imposed on goods manufactured or produced in the Philippines for domestic sale or
consumption or any other disposition:
a. Value Added Tax
b. Excise Tax
c. Expanded Withholding Tax
d. Final Withholding Tax

29. A kind of withholding tax which is prescribed only for certain payers and is not creditable against the
income tax due of the payee for the taxable year, I.e., tax withheld by banks on the interest income
earned on bank deposits:
a. Value Added Tax
b. Excise Tax
c. Expanded Withholding Tax
d. Final Withholding Tax

30. A kind of withholding tax which is prescribed only for certain payers and is creditable against the
income tax due of the payee for the taxable quarter year:
a. Value Added Tax
b. Excise Tax
c. Expanded Withholding Tax
d. Final Withholding Tax
31. The following are objects of taxation, EXCEPT:
a. Persons
b. Excise Objects
c. Right
d. Circle

32. Limitations of taxation is inherent or natural restrictions. These DOES NOT include:
a. Taxes levied only for public purposes
b. International comity
c. Territorial jurisdiction
d. Due process of law

33. Under our Constitution, the President's failure to communicate his veto of any bill within 30 days
after receipt thereof causes the bill to:
a. Automatically considered as refused
b. Be idle on the President's desk
c. Become a law
d. None of the above

34. The administrative powers to tax can Is exercised by the legislative only:
a. Absolutely, True
b. Absolutely, False
c. Generally, True
d. Generally, Maybe

35. Poll tax is:


a. Punishable by imprisonment when unpaid
b. Not community tax
c. Found in the Art. III, Sec. 20 of the Philippine Constitution
d. Exercised by the police

36. Constitutional limitations of taxation include:


a. The power of judicial review
b. Death penalty for nonpayment of poll tax
c. International comity
d. Prohibitions on delegation
37. Statement 1: If a taxpayer married during the year, he may claim the personal exemption for married
individual in full for such year.
Statement 2: A dependent child who married within the year may still qualify as dependent for the
year.

a. True, True
b. True, False
c. False, True
d. False, False

38. The personal exemption of the non-resident alien engage in trade or business in the Philippines is
equal to that allowed by:
a. The income tax law of his country to a citizen of the Philippines not residing there
b. The income tax law of his country to a citizen of the Philippines not residing there or the
amount provided by the NIRC to a citizen or resident whichever is lower
c. The NIRC to a citizen or resident
d. The income tax law of his country to a citizen of the Philippines not residing there or
the amount provided by the NIRC to a citizen or resident whichever is higher

39. Who is a non-resident alien not engaged in business in the Philippines?


a. An alien who comes to the Philippines for a definite purpose shall be claimed in its nature
may be promptly accomplished
b. An alien who comes to the Phil. for a definite purpose which in its nature would
require an extended stay of more than 180 days
c. An alien who has acquired residence in the Philippines
d. An alien who lives in the Philippines with no definite intention as to his stay

40. A non-resident alien is deemed doing business in the Philippines if he:


a. Is an individual whose residence is within the Philippines
b. Is an individual whose father or mother is an alien who is engage in business in the Philippines
c. is an individual who is naturalized in accordance with law
d. Shall come to the Phil. and stay therein for an aggregate period of more than 180 days during
a calendar year

41. Who may NOT claim personal exemption?


a. Non-resident citizen
b. Non-resident alien engaged in trade or business in the Philippines under certain conditions
c. Resident alien
d. Non-resident alien who stayed in the Philippines for 175 days

42.Which of the following individual taxpayers cannot avail of the deduction for health and
hospitalization insurance premium?
a. Non-resident citizen
b. Resident alien
c. Non-resident alien engaged in business in the Philippines
d. Non-resident alien not engaged in business in the Philippines
43. The process where the sovereign raises income to defray the expenses of the government
a. Subsidiary
b. Tariff
c. Taxation
d. Tribute

44. One of the characteristics of internal revenue tax is that they are
a. Criminal in nature
b. Penal in nature
c. Political in nature
d. Generally prospective in application

45. In case of conflict between tax laws and generally accepted accounting principles
a. Both tax laws and GAAP shall be enforced
b. GAAP shall prevail over tax laws
c. Tax laws shall prevail over GAAP
d. The issue shall be received by the court

46. Which has no power to taxation?


a. Provinces
b. Cities
c. Baranggays
d. Barrios

47. Schedular system of income taxation means:


a. All types of income are added together to arrive at a gross income
b. Separates graduated rates are imposed on different types of income
c. Capital gains are excluded in determining gross income
d. Compensation and business income are added to arrive at a gross profit

48. Which is true?


a. Opinions of legal luminaries are sources of tax laws
b. The constitution grants exemption from all kinds of taxes to religious orgs.
c. Because the power to tax is unlimited comprehensive, plenary, supreme the power to tax can
reach over into any jurisdiction to seize upon person or property
d. The benefits protection theory is the source of the doctrine of symbolic relationship
49. It is achieved through the passage of tax law that defines the tax system of a nation:
a. Tax Legislation
b. Tax Administration
c. Tax Policy
d. Tax Assessment

50. A fundamental rule in taxation is that the property of one country may not be taxed by another
country. This is known as:
a. International Law
b. International Comity
c. Reciprocity
d. International Inhibition

51. Which of the following statements is NOT correct?


a. Collections from taxes are public money
b. Appropriation of taxes for the common good of the people is valid
c. Construction of private road from taxes is a valid appropriation
d. Allocation of taxes for the benefit of greater portion of population is considered for public
purposes

52. A taxpayer gives the following reasons in refusing to pay a tax. Which of his reasons is NOT
acceptable for legally refusing to pay the tax?
a. That he has been deprived of due process of law
b. That there is lack of territorial jurisdiction
c. That he derives no benefit from the tax
d. That the prescriptive period for the tax has elapsed

53. The following are the constitutional limitations on the power of taxation, EXCEPT:
a. Taxes are not subject to set-off or compensation
b. Only Congress can exercise the power of taxation
c. Non-impairment of the obligation of contracts
d. The rule of taxation must be uniform

54. The following are business taxes EXCEPT:


a. Value-added Tax
b. Other Percentage Tax
c. Excise Tax
d. Custom Duties
55. All are levels for measuring the fair value of a specific account, EXCEPT:
a. Observable, quoted prices for identical assets
b. Observable, quoted prices for similar asset
c. Quoted prices for similar assets
d. Unobservable inputs for the asset

56. All are classified as persons, EXCEPT:


a. Alien
b. Resident
c. Partnership
d. Sole Proprietorship

57. Fiscal year differs that of the calendar year in a way:


a. Fiscal year has a period of more than 12 months
b. Calendar year can start on June 1
c. Fiscal year can start on June 1
d. Calendar year has a period of less than 12 months

58. Which of the following DOES NOT pertain to a a non-resident citizen?


a. A citizen of the Philippines who establishes to the satisfaction of the Commissioner the fact of
his physical presence abroad with a definite intention to reside therein.
b. A citizen of the Philippines who leaves the Philippines during the taxable year to reside
abroad, either as an immigrant or for employment on a permanent basis.
c. A citizen of the Philippines who works and derives income from abroad and whose
employment thereat requires him to be physically present abroad most of the time during the
taxable year.
d. A citizen who has not been previously considered as nonresident citizen and who arrives in
the Philippines at any time during the taxable year to reside permanently in the Philippines

59. The term "foreign", when applied to a corporation, means a corporation which is not domestic is the
same as to the term "alien":
a. True
b. False
c. Either
d. I dont know

60. Which of the following is/are characteristics of a scheduler system of taxation?


I. It accords different tax treatment on the income of the individual taxpayer.
II. It classifies income on the individual taxpayer.

a. True, True
b. True, False
c. False, False
d. False, True
61. One of the following is a primary purpose of taxation
a. Protection of local industries against foreign competition through imposition of high customs
duties on imported goods
b. Reduction of inequalities in wealth and income by imposing progressively higher tax rates
c. To secure revenue for the support of the government
d. Strengthening of anemic enterprises by giving tax exemptions

62. Which of the following is not a secondary purpose of taxation?


a. To serve as key instrument of social control
b. To effect a more equitable distribution of wealth among people
c. To achieve social and economic stability
d. To raise revenue to defray the necessary expenses of the government

63. Which of the following is not one of the canons of a sound tax system?
a. Quantifiability
b. Equity
c. Certainty
d. Convenience

64. The requirement of equality of theoretical justice is complied with if the tax is
a. Progressive
b. Regressive
c. Ad valorem
d. Specific

65. The power of taxation can only be exercised by the lawmaking body
a. Subject to constitutional and inherent limitations
b. Equality or theoretical justice
c. Legislative in character
d. Inherent in sovereignty

66. The legislative body can impose a tax at any amount underscores the legal truism that taxation is
a. Inherent power of tax
b. A very broad power of state
c. Essentially legislative power
d. For public purpose
67. Statement 1: Imposition of taxes is a legislative act.
Statement 2: Collection of taxes is an administrative act.
a. First statement is correct
b. Second statement is correct
c. Both statements are correct
d. Both statements are incorrect

68. The only tax where non-payment of which will not result to imprisonment:
a. Excise Tax
b. Donor's Tax
c. Personal Tax
d. Property Tax

69. Statement 1: Tax avoidance is a form of tax escape.


Statement 2: Tax evasion is not punishable.
a. First statement is correct
b. Second statement is correct
c. Both statements are correct
d. Both statements are incorrect

70. All are secondary purpose of taxation EXCEPT:


a. Sumptuary Purpose
b. Regulatory Purpose
c. Compensatory Purpose
d. Uniformity Purpose

71. Which one of the following is NOT a major tax under the Tax Code?
a. Income tax
b. Donor's tax
c. Excise tax
d. Estate tax

72. An ad valorem tax:


a. Real estate tax
b. Income tax
c. Excise tax on wine
d. Excise tax on cinematographic films
73. When exemption from tax imposition is silent or not clearly stated, which is true?
a. Taxation applies since exemptions are construed against the government
b. Exemption still applies since this is an instance of exemption by omission
c. Taxation applies since exemption are construed against the taxpayer
d. Exemption applies since obligation arising from law cannot be presumed and hence construed
against the government

74. What DOES NOT properly describe the scope of taxation?


a. Comprehensive
b. Supreme
c. Discretionary
d. Unlimited

75. The courts cannot issue injunction against the government's effort to collect taxes is justified by:
a. The lifeblood doctrine
b. Imprescriptible of taxes
c. The ability to pay theory
d. The doctrine of estoppel

76. Which of the following is NOT a legislative act in the stages in exercising taxation power?
a. Determining the purpose of the tax
b. Assessment of the tax
c. Determination of the subject of the tax
d. Setting the amount of the tax

77. All of the following are secondary purposes of taxation EXCEPT:


a. To reduce social inequality
b. To protect local industries
c. To raise revenue for the support of the government
d. To encourage growth of local industries

78. Which of the following shows a WRONG statement between the difference of Taxes and Tolls?
a. Tax is a demand of sovereignty while toll is a demand of ownership
b. The amount of tax depends on the need of the government while the amount of toll depends
upon the value of the property released
c. Both government and private entities may impose tolls but private entities cannot impose
taxes
d. Tax is a demand of ownership while toll is a demand of sovereignty
79. Which of the following is NOT exercised by the government?
a. Taxation
b. Police Power
c. Eminent Domain
d. Exploitation

80. What is the primary purpose of Taxation?


a. To enforce contribution from its subject to public purpose
b. To raise revenue
c. To achieve economic and social stability
d. To regulate the conduct of business of profession

81. The following are Inherent limitations of the Taxation Power EXCEPT:
a. Public Purpose
b. Exemption of Government
c. Equal Protection of Law
d. International Comity

82. It occurs when all the elements of Double Taxation exist for both impositions:
a. Double Taxation
b. Indirect Double Taxation
c. Direct Double Taxation
d. None of the Above

83. The place of taxation is:


a. Situs Rule
b. Situs
c. Territoriality
d. Gross Income

84. This is the process of transferring tax burden to other taxpayers:


a. Capitalization
b. Transformation
c. Shifting
d. None of the above
85. Which of the following defines the country's tax policy?
a. Philippine Constitution
b. National Internal Revenue Law
c. Pari Materia Principle
d. Tax Transformation

86. Taxation co-exist with the four elements of the state which includes:
a. Government
b. Property
c. Sovereignty
d. Territory

87. Which of the following is/are natural qualities of Taxation power?


I. An inherent power
II. Essentially an executive function
III. An absolute power
IV. Territorial in operation

a. I and IV only
b. II and III only
c. I and II only
d. I only

88. Which of the following could be an object of Taxation?


a. Person
b. Intangible Property
c. Rights
d. All of the above

89. Which of the following statements are correct?


I. Taxation is the government's legitimate means of interfering with the private properties of its
subjects.
II. All government entities regardless of their functions are exempted from taxes because it
would be impractical for the government to be taxing itself.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

90. As to scope, Taxation is:


a. Plenary, comprehensive and supreme
b. Broader in application general power to make and implement laws
c. Merely a power to take private property for public use
d. None of the above
91. It is the general pardon granted by the government for erring taxpayers to give them a chance to
reform and enable them to have a fresh start to be part of a society with a clean state:
a. Tax Condonation
b. Amnesty
c. Both A and B
d. None of the Above

92. It is also known as Tax Dodging, refers to any act or trick that tends to illegally or avoid the payment
of tax:
a. Tax Evasion
b. Tax Exemption
c. Tax Avoidance
d. None of the Above

93. It occurs when at least one of the secondary elements of Double Taxation is not common for both
impositions:
a. Double Taxation
b. Indirect Double Taxation
c. Direct Double Taxation
d. None of the Above

94. The following are Constitutional Limitations of Taxation Power EXCEPT:


a. Due Process of Law
b. Equal Protection of Law
c. Uniformity rule of Taxation
d. Public Purpose

95. Which of the following is NOT an example of excise tax:


a. Transfer Tax
b. Sales tax
c. Real property tax
d. Income tax

96. Value-added tax is an example of:


a. Graduated tax
b. Progressive tax
c. Regressive tax
d. Proportional tax

97. The proportional contribution by persons and properties levied by the law-making body of the State
by virtue of its sovereignty for the support of the government and public needs is referred to as:
a. Taxes
b. Special assessment
c. License fees
d. Answer not given
98. One of the characteristics of a tax is that:
a. It is generally based on contract
b. It is generally payable in money
c. It is generally assignable
d. Answer not given

99. Tax of a fixed proportion of the value of the property with respect to which the tax is assessed and
requires the intervention of assessors or appraisers to estimate the value of such property before the
amount due from each taxpayer can be determined is known as:
a. Specific
b. Ad valorem
c. Special or regulatory
d. Answer not given

100. The process by which the sovereign raises income to defray the expenses of the government is
called:
a. Subsidy
b. Tariff
c. Taxation
d. Tribute