Multiple Choice

Assignment
1. The following are national internal
revenue taxes. Which one is not?

Excise Tax

Import Duty

Documentary Stamp Tax

Value-added Tax
2. One of the characteristics of internal
revenue laws is that they are

Generally prospective in application

Criminal in nature

Penal in nature

Political in nature
3. Which statement is false? Income Tax

Is always based on gross amount.

Is a tax on all yearly profits arising from property,
profession, trade or business.
Is a tax on person’s income, emoluments or profits.

Is always a direct tax.

4. Percentage tax is an example of

Graduated Tax

Proportional Tax

Progressive Tax

Regressive Tax
5. As to object, taxes may be classified
according to the following except one.
Which one is the exception?

personal, poll or capitation

property

excise

specific
6. The following are sources of tax laws.
Which is not a source?

Barangay resolutions

Supreme Court Decisions

Revenue Regulations by the Department of Finance

Treaties or international agreements

7. Provincial, city, municipal and barangay
ordinances may impose taxes subject to
limitations by the LGC. Which is not a tax
thereunder?
Professional Tax

Community Tax

Travel Tax

Real Property Tax

8. Which of the following statements is
true? The Bureau of Internal Revenue
shall have the

Commissioner of IR and 2 Deputy Commissioners

Commissioner of IR and 3 Deputy Commissioners

Commissioner of IR and 5 Deputy Commissioners

Commissioner of IR and 7 Deputy Commissioners

9. In case of conflict between tax laws
and GAAP

Both tax laws shall prevail over GAAP

GAAP shall prevail over tax laws

The issue shall be resolved by the courts

Tax laws shall prevail over GAAP

10. The following are authorized to
administer oaths and take testimony.
Who is not?

BIR Commissioner

BIR Deputy Commissioner

BIR Service Chief

BIR rank-and-file employee

11. 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 may be imposed
None of the above
12. Which is not a valid definition of
income?

Income is a fund at one distinct point of time

Income is the return from capital invested

Income means all wealth which flows into the
taxpayer other than a mere return of capital
Income means cash or its equivalent unless otherwise
specified
13. Tax as distinguished from license fee

A regulatory measure

Imposed in the exercise of police power

Non-payment does not necessarily render the
business illegal
Limited to cover cost of regulation
14. Taxation is a means by which the
national government attempts to

Shift wealth from the rich to the poor

Maintain price stability

Encourage full employment

All of the above

15. The following statements are correct
except one. Which one?

The provisions of taxation in the Constitution are

grants of power not limitations on taxing powers.
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.
16. One of the following is not among
the basic principles of a sound tax
system. Which one is it?

Fiscal Adequacy

Theoretical Justice

Collection of Tax

Administrative Feasibility
17. All of the following except one are
inherent limitations of taxation.

Taxes may be levied only for public purpose

The State may tax persons and properties under its
jurisdiction
The property of another State may not be taxed by
other State
Governmental agencies are exempt from taxation
18. Which statement refers to police
power as distinguished from taxation?

Can only be imposed on specific property

It involves the taking of property by the government

The amount imposed depends on whether the
activity is useful or not
The amount imposed has no limit
19. One characteristic of a tax is that

It is generally based on contract.

It is generally payable in money.

It is generally assignable.

None of the above.

20. Whis is not an example of excise tax

Real property tax

Transfer tax

Value-added tax

Income tax
21. Which one is not a similarity among
taxation, eminent domain, and police
power?

Are necessary attributes of sovereignty

Affect all persons or the public

Interfere with private rights and property

Are legislative in implementation

22. Tax of a fixed proportion of the
value of the property with respect to
which the tax is assessed.

Specific

Special or regulatory

Ad valorem

None of the above

23. When BIR and taxpayers are unable to
agree as to the correct application of tax
statutes,

BIR decision prevails.

Taxpayer’s decision prevails.

Court decision prevails.

All of the above.

24. Situs is the place of taxation. Which
is not true?

Citizenship is not a factor to consider.

Situs of persons is the residence of the taxpayer.

Subject matter is a must to determine situs.

None of the above.

25. Which is not a nature of taxation?

Means by which the government raises income.

The government solely benefits from it.

It is inherent in sovereignty.

The citizenry benefits from it.

26. The proportional contribution by persons
and property by the State by virtue of its
sovereignty for the support of the
government and all public needs.
License fees

Special assessment

Taxes

None of the above

 Assignment
I. Classification of Individual Income Taxpayers
o Citizen
o Alien
II. Personal Exemptions
Basic Personal Exemptions
Additional Exemption
III. Taxable Income
 Net Compensation Income
 Gross Compensation Income