General Principles and Concepts

1. No law granting any tax exemption shall be passed without the

concurrence of two thirds of the members of the congress. F (only
majority is required)
Problem 1-1 True or False
2. Churches are exempt from payment of income taxes. F (exempt
Write True if the statement is correct or False if the statement is incorrect.
from real property taxes only)
3. A tax may be levied for the support of religious activities as long
1. Eminent domain and police power can effectively be performed
as all churches benefit from it. F
even without taxation. F ( government needs revenue to carry out
4. A bill not signed by the President can still become law. T (2/3 of
all its functions)
members of the house is required)
2. Taxes may be imposed to encourage economic growth by
5. No person shall be imprisoned for nonpayment of income tax.
granting tax exemptions. T
6. Taxation is considered as the lifeblood of the government and
3. Taxation is a way of apportioning the cost of government among
every government unit must exercise this power.
those who are privileged to enjoy its benefits. T
7. The amount of taxes may be increased to curve spending power
4. The state can enforce contributions upon its citizens in the form of
and minimize inflation. T ( to decrease money supply and
taxes even without a provision in the Constitution authorizing it. T
consequently minimize inflation and spending power)
(this is an inherent power of the state)
8. Benefits from taxation have to be experienced to justify the
5. The police power of the government may be exercised through
legitimacy of collection of taxes from the people. F
taxation.
9. Taxes may be used as a tool and weapon in international
6. When the power to tax is delegated to the local government,
relations and protect trade relations. T
only the legislative branch of the local government can exercise
10. The power of legislative review in taxation is limited only to the
the power.
interpretation and application of tax laws. F ( judicial)
7. The power of taxation can be exercised without limitation
11. The rule of “ex post facto law” is applicable for tax purposes. F
because its scope is unlimited. F ( it has inherent and
12. Real estate tax and income tax collected on the same real estate
constitutional limitations)
property is double taxation. F (different nature)
8. The power of taxation is absolute because it is the strongest of all
13. A tax evader sidesteps the law, while the tax avoider breaks it. F (
powers of the government. F ( subject to inherent and
reverse)
constitutional limitations
14. Tax exemption is transferable and assignable. F ( it is personal in
9. Taxation presupposes an equivalent compensation. T
nature)
10. There is no imposition of amount in police power. F
15. Taxation is the government’s legitimate means of interfering with
11. Police power and eminent domain may defeat the constitutional
the private properties of its subjects.T
rights of a person.
12. Tax exemption applies only to government entities that exercise
proprietary functions. F ( government functions)
Problem 1-3 True or False
13. All government entities regardless of their functions are exempted
Write True if the statement is correct or False if the statement is incorrect.
from taxes because it would be impractical for the government
to be taxing itself. F
1. The doctrine of equitable recoupment is applicable to cases
14. The state can still exercise its taxing powers over its citizen outside
where the taxes involved are totally unrelated.
its territory. T (privity of relationship)
2. Protection is the basic consideration that justifies tax situs. T
3. The tax situs for occupation is the place where occupation is
pursued even if the criterion for nationality is given.
Problem 1-2 True or False
Write True if the statement is correct or False if the statement is incorrect.
4. There is no direct double taxation by taxing corporate income
and corporate stockholders’ dividends from the same
corporation. T (different objects)
5. Tax laws are given retroactive effects. F
6. In the imposition of taxes, public purpose is presumed. T
7. Taxes are obligations created by law.
8. Taxes collected by the BIR are local taxes. F
9. Nonpayment of license fee makes the business illegal. T
10. In taxation, it is one’s civil liability to pay taxes which gives rise to
criminal liability. T
11. Tax laws must be construed strictly against the government, and
tax exemptions must be construed strictly against the taxpayer. T
12. As a rule doubts must be resolved liberally in favor of the
government and strictly against the taxpayer. F
13. The Philippine tax laws are not political and penal in nature. T
14. When there is ambiguity of tax laws, the rules of statutory
construction may be used to search for the legislative intent.
However, when the meaning of the law is clear, the statute must
be enforced as written. T
15. Revenue regulations that are inconsistent with law have the
effect and force of law if they are useful and reasonable. F