1.

It is the proportional contribution by persons and property levied by the lawmaking body of the
state by virtue of its sovereignty for the support of government and all public needs.

a. Taxes
b. License fees
c. Special assessment
d. None of the above

2. “The Power to tax is the power to destroy” is also known as:

a. Marshall dictum
b. Holmes dictum
c. The Life Blood Doctrine
d. Fiscal Adequacy

3. One of the following is not among the basic principles of a sound tax system. Which one is it?

a. Fiscal Adequacy
b. Symbiotic Doctrine
c. Theoretical Justice
d. Administrative Feasibility

4. Which theory in taxation states that without taxes, a government would be paralyzed for lack of
power to activate and operate it, resulting in its destruction?

a. Power to destroy theory

b. Lifeblood theory
c. Sumptuary theory
d. Symbiotic doctrine

5. Which theory in taxation states that the government and the people have the reciprocal and
mutual duties of support and protection to one another?

a. Power to destroy theory

b. Lifeblood theory
c. Sumptuary theory
d. Symbiotic doctrine

6. Which statement is False?

a. Taxation is one of the inherent powers of the State

b. Taxes are the lifeblood of the government without which, it can neither exist nor endure
 c. The power to tax includes the power to destroy
d. Construction of tax statutes are in favor of the Government

7. Which statement is False?

a. The three inherent powers of the state are Taxation, Police Power, and Eminent Domain
b. The Legislature can exercise all 3 of the Inherent Powers of the State
c. The three Inherent powers may co-exist in one act of the government
d. The power to tax is Superior to the non-impairment clause

8. The distinction of a tax from a license fee is that tax is

a. Imposed for regulation

b. One which involves an exercise of police power
c. One in which there is generally no limit on the amount that may be imposed.
d. None of the above.

9. Which of the following correctly states the basic principles of a sound tax system?

a. Proportional, Progressive and Regressive

b. Fiscal Adequacy, Administrative Feasibility, and Theoretical Justice
c. Comprehensive, Unlimited, Plenary, and Supreme
d. Levy, Assessment, and Payment

10. Which of the following is not an Inherent Limitation to the power to tax?

a. Public Purpose
b. International Comity
c. Territoriality
d. Equal Protection

11. The Constitution mandates that the rule on taxation must be uniform, and equitable and that
the State must evolve a progressive system of taxation. This means that:

a. Regressive System of taxation is preferred

b. Taxes should always be based on the tax payer’s ability to pay
c. Direct taxes should be preferred
d. Indirect taxes are prohibited

12. Classification of Taxes as to Purpose:

a. National and Local

 b. Fiscal and Regulatory
c. Personal, Property and Excise
d. Direct and Indirect

13. Classification of Taxes as to Scope:

a. National and Local

b. Fiscal and Regulatory
c. Personal, Property and Excise
d. Direct and Indirect

14. Anne, a Natural Born Filipino Citizen and a Resident of New York, Cubao, went to Canada for a 1-
month vacation. She stayed with her Aunt who is now a Canadian Citizen. During her stay there,
she lent her aunt ₱20,000.00 which was paid to her before she left for the Philippines. Suppose
that her aunt paid her ₱24,000.00 how much income should Anne include in her ITR to be filed
here in the Philippines?

a. ₱20,000.00
b. ₱4,000.00
c. ₱0
d. None of the above

15. In not more than two sentences, explain your answer to the above question. (5 pts)

16. Suppose in the same example, Anne paid rent to her Aunt for ₱50,000.00. How much income
should her aunt include in her ITR to be filed here in the Philippines?

a. ₱50,000.00
b. ₱26,000.00
c. ₱20,000.00
d. None of the above

17. In not more than two sentences, explain your answer to the above question. (5 pts)