TAXATION
General Principles
Question 0001
Which of the following is the principal purpose of taxation?
a. Accumulation of funds for the functioning of the government machineries
b. Transfer of wealth from the richer sections of society to poorer sections
c. Address externalities
d. Generation of accountability and better governance
Question 0002
Which of the following is true regarding the aspects of taxation?
a. It is within the scope of the legislative branch of the government
b. It is within the scope of the executive branch of the government
c. It is within the scope of the judicial branch of the government
d. It is within the scope of both legislative and executive branch of the government
Question 0003
What makes the taxation different from the police power and the power of eminent domain?
a. It may be exercised only by the government
b. The imposed amount generally has no limit
c. It is for the public good or welfare
d. It is the most all-encompassing of the three powers
Question 0004
This inherent power may be exercised by a non-governmental entity.
a. Police power
b. Power of eminent domain
c. Power of taxation
d. Emergency power
Question 0005
Which of the following concepts is most related to the power of taxation?
a. Expropriation
b. Land acquisition
c. Revenue
d. Resumption
Question 0006
Which of the following is an inherent limitation of the state's power to tax?
a. The imposition of tax must be for public purpose
b. The non-impairment of the Supreme Court's jurisdiction regarding tax cases
c. The due process of law
d. The uniformity and equity rule
Question 0007
Which of the following is a constitutional limitation of the state's power to tax?
a. Exemption from taxation of the government
b. Non-appropriation of public funds for religious purposes
c. Application of the tax laws should be within the state's territory
d. The tax should be for the public purpose
Question 0008
Provided that just compensation will be paid, a state may acquire a private property for public purpose. What is this
power?
a. Power of eminent domain
b. Police power
c. Power of taxation
d. Emergency power
Question 0009
If the state, in promotion of general welfare, uses its power to regulate liberty and property, it will use its
a. Power of eminent domain
b. Police power
c. Power of taxation
d. Coercive power
Question 0010
The imposition of tax proportionate to the ability of the taxpayer to pay is a manifestation of
a. Economic consistency
b. Administrative feasibility
c. Theoretical justice
d. Fiscal adequacy
Question 0011
"Sufficiency of the state's revenue is based on the demands of public expenditures" - is most related to which of the
following?
a. Revenue sourcing
b. Administrative feasibility
c. Equality or theoretical justice
d. Fiscal adequacy
Question 0012
The tax system should be capable of being properly and efficiently administered by the government and enforced with
the least inconvenience to the taxpayer.
a. Public capability
b. Administrative feasibility
c. Equality or theoretical justice
d. Fiscal adequacy
Question 0013
Statement I: All revenues and assets of non-stock, non-profit educational institutions used actually, directly, and
exclusively for educational purposes shall be exempt from taxes and duties.
Statement II: The President shall have the power to veto any particular item or items in a tariff bill and will affect all the
items in the particular bill.
Which of the foregoing statements is/are true?
a. I only
b. II only
c. Both I and II
d. Neither I nor II
Question 0014
This is a burden, generally in form of money, forced by the government on entities (persons or property) for public use.
a. Assessment
b. Tax
c. License fee
d. Toll
Question 0015
By principle, when persons or things of the same class are taxed at the same rate, there is
a. Uniformity
b. Equality
c. Reciprocity
d. Simplicity
Question 0016
The following are essential characteristics of tax, except for:
a. Levied by the lawmaking body of the state
b. Payable in cash or money
c. Enforced contribution
d. The amount that can be imposed is unlimited
Question 0017
The following are essential characteristics of the special assessment, except for:
a. Based exclusively on the derived benefit by the landowners
b. Not a personal liability of the persons assessed
c. Based on public necessity
d. Levied on land
Question 0018
It is the reduction or removal of liability to make a compulsory payment that would otherwise be imposed by a ruling
power upon persons, property, income, or transactions.
a. Tax credit
b. Tax amnesty
c. Tax exemption
d. Tax incentive
Question 0019
Statement I: Revenue laws are political in nature.
Statement II: Tax laws are general laws
Which of the foregoing statements is/are true?
a. I only
b. II only
c. Both I and II
d. Neither I nor II
Question 0020
Statement I: The amount taxed is limited to the cost of regulation.
Statement II: Non-payment of tax makes a business illegal.
Which of the foregoing statements is/are true?
a. I only
b. II only
c. Both I and II
d. Neither I nor II
Answer Key!
1. A
2. D
3. B
4. B
5. C
6. A
7. B
8. A
9. B
10. C
11. D
12. B
13. A
14. B
15. A
16. D
17. C
18. C
19. D
20. D
Question 0021
This is the utilization of illegal means to avoid tax payment
a. Evasion
b. Avoidance
c. Exemption
d. Shifting
Question 0022
This is the utilization of means allowed by law to avoid tax payment
a. Evasion
b. Avoidance
c. Exemption
d. Shifting
Question 0023
This is another term for tax evasion
a. Tax benefit
b. Tax exemption
c. Tax avoidance
d. Tax dodging
Question 0024
This is another term for tax minimization
a. Tax evasion
b. Tax exemption
c. Tax avoidance
d. Tax dodging
Question 0025
When in doubt, tax statutes are construed a. Liberally in favor of both the government and the taxpayer
b. Strictly against both the government and the taxpayer
c. Liberally in favor of the government and strictly against the taxpayer
d. Strictly against the government and liberally in favor of the taxpayer
Question 0026
When in doubt, tax exemptions are construed a. Liberally in favor of both the government and the taxpayer
b. Strictly against both the government and the taxpayer
c. Liberally in favor of the government and strictly against the taxpayer
d. Strictly against the government and liberally in favor of the taxpayer
Question 0027
When there is a conflict between the Tax Code and the Philippine Financial Reporting Standards or PFRS a. The taxpayer has the discretion on what to use
b. Modified cash basis shall be used
c. Tax Code shall prevail
d. PFRS shall prevail
Question 0028
For a specific territory, this is the fixed amount tax imposed upon the residing people.
a. Progressive
b. Excise
c. Property
d. Poll
Question 0029
Tax on properties proportional to its value or other reasonable measurement bases.
a. Progressive
b. Excise
c. Property
d. Poll
Question 0030
Tax on occupation engagement.
a. Progressive
b. Excise
c. Property
d. Poll
Question 0031
A tax, such as income tax, which is levied on the income or profits of the person who pays it, rather than on goods or
services.
a. Income
b. Excise
c. Indirect
d. Direct
Question 0032
A tax collected by an intermediary from the person who bears the ultimate economic burden of the tax.
a. Income
b. Excise
c. Indirect
d. Direct
Question 0033
A tax that is defined as a fixed amount for each unit of a good or service sold, such as peso per kilogram.
a. Income
b. Excise
c. Ad valorem
d. Specific
Question 0034
A tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a
transaction.
a. Income
b. Excise
c. Ad valorem
d. Specific
Question 0035
A tax imposed so that the tax rate is fixed, with no change as the taxable base amount increases or decreases.
a. Direct
b. Regressive
c. Progressive
d. Proportional
Question 0036
This tax imposes a greater burden on the poor than on the rich.
a. Direct
b. Regressive
c. Progressive
d. Proportional
Question 0037
Tax in which the tax rate increases as the taxable amount increases.
a. Direct
b. Regressive
c. Progressive
d. Proportional
Question 0038
This is also called 'per unit tax'.
a. Progressive
b. Excise
c. Ad valorem
d. Specific
Question 0039
Negative income tax is a a. Progressive
b. Excise
c. Regressive
d. Proportional
Question 0040
Which of the following is not a constitutional limitation of the power of taxation?
a. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the
equal protection of the law.
b. The rule of taxation shall be uniform and equitable
c. No person shall be imprisoned for debt and non-payment of a poll tax.
d. The tax must be for a public purpose.
Answer Key!
21. A
22. B
23. D
24. C
25. D
26. C
27. C
28. D
29. C
30. B
31. D
32. C
33. D
34. C
35. D
36. B
37. C
38. D
39. A
40. D