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Instructions: Select the letter corresponding to the 9.

All are similarities of taxation, police power


choice that best completes each statement or and power of eminent domain, except
answers each question. a. All are necessary attributes of the
1. All are characteristics of the power of constitution
taxation, except: b. All exist independently of the
a. It is an inherent power Constitution
b. It is legislative in character c. All contemplate an equivalent benefit
c. It is civil in character d. All are superior to the non-impairment
d. It is subject to inherent and clause of the constitution
constitutional limitations
10. Below are characteristics of a sound taxation
2. Our tax laws are: system, except:
a. Political in nature a. Administrative feasibility and
b. Civil in nature compliance
c. Penal in nature b. Fiscal Adequacy
d. Social in nature c. Theoretical justice or equality
d. Uniformity of taxation
3. Also known as tax administration
a. Collection of taxes 11. It refers to a fraudulent act of minimizing
b. Levying of taxes taxes
c. Payment of taxes a. Tax avoidance
d. Incidence of taxation b. Tax evasion
c. Tax minimization
4. Taxation is an inherent power because: d. Multiple taxation
a. It is the lifeblood of the government
b. It is about the protection and benefit 12. One of the following is not an inherent
theory limitation:
c. It co-exist with the existence of the state a. Taxes must be for public purpose
d. It is exercised for the general welfare of b. Equality in taxation
the people c. Territoriality rule
d. Rule on double taxation
5. All are essential characteristics of a tax
except, except: 13. All of the following is an exception to the
a. It is an enforced contribution territoriality doctrine except one
b. It is generally unlimited in amount a. In case of taxation of resident or citizens
c. It is generally payable in money of the Philippines
d. It is a proportionate burden b. If provided under a treaty obligation
c. In case of International Comity
6. A tax is invalid in all of the following, except: d. In case of International organizations
a. Theory of taxation and its purpose are
disregarded 14. Taxation is equitable in all of the following
b. Basis of taxation is not recognized cases, except:
c. Inherent and constitutional limitations a. Its burden falls on those better to pay
are not observed b. It is based on the ability to pay
d. It results to double taxation c. It is based on benefits received
d. It is based on uniformity rule
7. All are secondary purposes of taxation,
except: 15. The only tax where nonpayment of which
a. Sumptuary purpose will not result to imprisonment:
b. Regulatory purpose a. Excise Tax
c. Compensatory purpose b. Donor’s Tax
d. Uniformity purpose c. Personal Tax
d. Property Tax
8. In the absence of inherent and constitutional
limitation, the power to tax is 16. One of the following is not a major tax under
a. Comprehensive the Tax Code:
b. Unlimited a. Income Tax
c. Both a and B b. Donor’s Tax
d. Regulatory c. Excise Tax
d. Estate Tax
26. Nonpayment of tax will only result to civil
17. One of the following can be both a liability.
progressive tax and a proportional tax: Tax Liabilities of a corporation will not
a. Donor’s Tax extend to the stockholders absolutely
b. Income tax on individuals a. True, true
c. Both A and B b. False, false
d. Estate Tax c. False, true
d. True, false
18. A tax which is both under taxation and police
power 27. All are objectives of taxation, except;
a. Compensation tax a. Revenue purpose
b. Regulatory Tax b. Regulation
c. National Tax c. Increase of social inequity
d. General Tax d. Encourage economic growth

19. A demand of proprietorship 28. I. Courts can review or inquire into the
a. Tax wisdom or advisability of a tax law and
b. Specific Assessment power of Judicial Review in Taxation.
c. Toll II. Our constitution does not contain any
d. License Fee provision granting tax exemption to the
government.
20. Levied only on lands a. True, true
a. Tax b. False, false
b. Special Assessment c. False, true
c. Toll d. True, false
d. License Fee
29. I. To be exempt from taxation under the
21. A proportional tax Constitution, land and buildings must be
a. Individual income Tax exclusively and actually used for religious
b. Corporate income Tax educational or charitable purpose, even if
c. Donor’s Tax not directly.
d. Estate Tax II. Exemptions of nonprofit schools are only
limited to revenue and assets derived from
22. Imposed to regulate conduct as a preventive strictly school operations
measure a. True, true
a. Tax b. False, false
b. Toll c. False, true
c. Penalty d. True, false
d. License Fee
30. I. Our Tax code prevails over the Civil Code
23. An Advalorem tax II. Tax regulations promulgated by the
a. Real estate tax Secretary of Finance need not be published
b. Income Tax in a newspaper of general circulation.
c. Excise Tax on wine a. True, true
d. Excise Tax on cinematographic films b. False, false
c. False, true
24. One of the following is not a source of our d. True, false
taxes
a. Administrative rulings and opinions 31. I. The power of taxation is inherent in
b. Juridical decisions sovereignty being essential to the existence
c. 1987 Constitutions of every government. Hence, even if not
d. Expert opinion on Taxation mentioned in the constitution the state can
still exercise the power.
25. The government may not do all except one: II. It is essentially a legislative function. Even
a. Tax itself in the absence of any constitutional
b. Delegate its power to tax private provision, taxation power falls to Congress
agencies as part of the general power of law-making.
c. Impose Tax arbitrarily a. False, false
d. Disregard uniformity in Taxation b. False, true
c. True, true
d. True, false b. Ability-to-pay theory
c. Theoretical justice
32. Which of the following is not a scheme of d. Equity in taxation
shifting the incidence of taxation?
a. The manufacturer transfer the tax to the 38. Statement I. A conviction for tax evasion is
consumer by adding the tax to the not a bar for collection of unpaid taxes.
selling price of the goods sold Statement II. Tax exemptions are strictly
b. The purchasers ask for a discount or construed against the government.
refuse to buy at regular prices unless it a. Only the 1st statement is true
is reduced by the amount equal to the b. Only the 2nd statement is true
tax he will pay c. All the statements are true
c. Changing the terms of the sale like FOB d. All the statements are false
shipping point in the Philippines to FOB
destination abroad, so that the title 39. Statement I. The City of Valencia claims that
passes abroad instead of in the it can impose additional taxes on banks
Philippines. under the Local Government Code (in
d. The manufacturer transfer the sales tax addition to the percentage tax on banks
to the distributor, then in turn to the imposed in the NIRC).
wholesaler, in turn to the retailer and Statement II. Such imposition (in Statement
finally to the consumer. I) is a direct double taxation.
a. Only the 1st statement is true
33. In case of conflicts between tax laws and b. Only the 2nd statement is true
generally accepted accounting principles c. All the statements are true
(GAAP): d. All the statements are false
a. Both Tax laws and GAAP shall be
enforced. 40. Statement I. Government units performing
b. GAAP shall prevail over the tax laws governmental functions are exempt from tax
c. Tax laws shall prevail over GAAP unless expressly taxable.
d. The issue shall be resolved by the Statement II. Government owned or
courts. controlled corporations exercising
proprietary functions are taxable unless
34. A waiver of the government’s rights to expressly exempt.
collect tax a. Only the 1st statement is true
a. Tax exemption b. Only the 2nd statement is true
b. Tax amnesty c. All the statements are true
c. Tax avoidance d. All the statements are false
d. Tax evasion
END
35. The theory which most justifies the necessity
of taxation
a. Protection and benefits theory
b. Revenue purposes theory
c. Lifeblood theory
d. Ability to pay theory

36. I. Tax exemptions are strictly construed


against the government.
II. When the tax law is not clear and there is
doubt whether he is taxable or not, the
doubt shall be settled against the
government.
a. Only the first statement is correct
b. Only the second statement is correct
c. Both statements are correct
d. Both statements are incorrect

37. As a basic principle of taxation, that “Taxes


must be based on the taxpayer’s ability to
pay “ is called:
a. Equality in taxation

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