Gen Principles of Taxation Reviewer

The requirement of equality or theoretical justice is complied with if the tax is A. Progressive B. Regressive C. Ad valorem D. Specific

A. Progressive

Which of the following is not one of the canons of a sound tax system? A. Quantifiability B. Equality C. Certainty D. Convenience

A. Quantifiability

Congress passed a sin tax law that increased the tax rates on cigarettes by 1000% . The law was thought to be sufficient to drive many cigarette companies out of business, and was questioned in court by a cigarette company that would go out of business because it would not be able to pay the increased tax. The cigarette company is A. Wrong because taxes are the lifeblood of the government B. Wrong because the law recognizes that the power to tax is the power to destroy C. Correct because no government can deprive a person of his livelihood D. Correct because Congress, in this case, exceeded the power to tax.

A. Wrong because taxes are the lifeblood of the government

The legislative body can impose a tax at any amount underscores the legal truism that taxation is A. An inherent power of the tax B. A very broad power of the state C. Essentially a legislative power D. For public purpose

B. A very broad power of the state

Although the power of taxation is basically legislative in character, it is not the function of the Congress to A. Fix with certainty the amount of taxes B. Collect the tax levied under the law C. Identify who should collect the tax D. Determine who should be subject to the tax.

B. Collect the tax levied under the law

One of the following is not an inherent limitation on the exercise of the power of taxation A. International comity B. Double taxation C. Non-delegation of the legislative power to tax D. Terriorality

B. Double taxation

Those who have more income should pay more income tax, while minimum wage earners should be exempt A. Uniformity of taxation B. Equality of taxation C. Due process of law D. Non-delegation of legislative power

B. Equality of taxation

Real property taxes should not disregard increases in the value of real property occurring over a long period of time. To do otherwise would violate the canon of a sound tax system referred to as A. Theoretical justice B. Fiscal adequacy C. Administrative feasibility D. Symbiotic relationship

B. Fiscal adequacy

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 B. Lifeblood theory C. Sumptuary theory D. Symbiotic doctrine

B. Lifeblood theory

Schedular system of income taxation means A. All types of income are added together to arrive at gross income B. Separate graduated rates are imposed on different types of income C. Capital gains are excluded in determining gross income D. Compensation income and business/professional income are added together in arriving at gross income

B. Separate graduated rates are imposed on different types of income

Which statement gives the correct answer? That a feasibility study needs or need to look into the taxes of different political subdivisions of government which may be alternative sites of the business because A. Provinces, cities and municipalities must have uniform taxes between and among themselves B. The local taxes of a political subdivision need not be uniform with the local taxes of another political subdivision C. Businesses that are subject to national taxes are exempted from local business taxes D. Local business taxes may be credited against national business taxes

B. The local taxes of a political subdivision need not be uniform with the local taxes of another political subdivision

Which statement below expresses the lifeblood theory? A. The assessed taxes must be enforced by the government. B. The underlying basis of taxation is government necessity, for without taxation, a government can neither exist nor endure C. The power of taxation is an arbitrary method of exaction by those who are in the seat of power D. The power of taxation is an inherent power of the sovereign to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues.

B. The underlying basis of taxation is government necessity, for without taxation, a government can neither exist nor endure

Under this basic principle of sound tax system, the government should not incur a deficit A. Theoretical justice B. Administrative feasibility C. Fiscal adequacy D. None of the above

C. Fiscal adequacy

The power of taxation can only be exercised by the lawmaking body A. Subject to constitutional and inherent limitations B. Equality or theoretical justice C. Legislative in character D. Inherent in sovereignty

C. Legislative in character

The president of the Philippines and prime minister of Japan entered into an executive agreement in respect of a loan facility to the Philippines from Japan whereby it was stipulated that interest on loans granted by private Japanese financial institutions in the Philippines shall not be subject to Philippines income taxes. What basic characteristic of basic taxation has been violated by this agreement? A. Inherent limitation B. Theoretical justice C. Legislative in character D. Administrative feasibility

C. Legislative in character

In case of conflict between tax laws and generally accepted accounting principles A. Both tax laws and GAAP shall be enforced B. GAAP shall prevail over tax laws C. Tax laws shall prevail over GAAP D. The issue shall be resolved by court

C. Tax laws shall prevail over GAAP

Which is the best answer? A tax reform at any given time underscores the fact that A. Taxation is an inherent power of the state. B. Taxation is essentially a legislative power. C. Taxation is a power that is very broad. D. The state can and should adopt progressive taxation

C. Taxation is a power that is very broad.

The city counsel passed an ordinance imposing an occupation tax on an air-conditioning technician. Conde is the only person with such occupation in the city. He challenged the validity of the ordinance as being discriminatory since he is the only one adversely affected. A. The contention of conde is tenable. B. The ordinance is unconstitutional because conde is denied of his right to equal protection of the law. C. The contention of conde is not justified because the rule on uniformity is not violated considering that the ordinance would also be imposed on all airconditioning technicians who may come within the jurisdiction of the city. D. The issue on validity or invalidity of the ordinance should be set aside.

C. The contention of conde is not justified because the rule on uniformity is not violated considering that the ordinance would also be imposed on all airconditioning technicians who may come within the jurisdiction of the city.

One of the following is a primary purpose of taxation A. Protection of local industries against foreign competition through imposition of high customs duties on imported goods. B. Reduction of inequalities in wealth and income by imposing progressively higher tax rates C. To secure revenue for the support of the government D. Strengthening of anemic enterprises by giving tax exemptions

C. To secure revenue for the support of the government

The power of taxation is inherent in sovereignty being essential to the existence of every government. Hence even if not mentioned in the constitution, the state can still exercise the power it is essentially a legislative function. Even in the absence of any constitutional provision, taxation power falls to congress as part of the general power of lawmaking. A. False, false B. False, true C. True, true D. True, false

C. True, true

Which of the following has no power of taxation? A. Provinces B. Cities C. Barangays D. Barrios

D. Barrios

Those restrictions on the exercise of the power of taxation that are found in the constitution or implied from its provisions A. Theoretical justice B. Legislative in character C. Inherent limitations D. Constitutional limitations

D. Constitutional limitations

One of the characteristics of internal revenue taxes is that they are: A. Criminal in nature B. Penal in nature C. Political in nature D. Generally prospective in application

D. Generally prospective in application

All of the following, except one, are canons of a sound tax system A. Fiscal adequacy B. Theoretical justice C. Administrative feasibility D. Inherent sovereignty

D. Inherent sovereignty

The following, except one, are basic principles of a sound tax system A.it should be capable of being effectively enforced B. It must be progressive C. Sources of revenue must be sufficient to meet government expenditures and other public needs D. It should be exercised to promote public welfare

D. It should be exercised to promote public welfare

The power to tax is the power to destroy. Is this always so? A. No. The executive branch may decide not to enforce a tax law which it believes to be confiscatory B. Yes. The tax collectors should enforce a tax law even if it results to the destruction of the property rights of a taxpayer C. Yes. Tax laws should always be enforced because without taxes the very existence of the state is endangered D. No. The supreme court may nullify a tax law hence, property rights are not affected

D. No. The supreme court may nullify a tax law hence, property rights are not affected

Which of the following statements is true? A. Opinions of legal luminaries are sources of tax laws. B. The constitution brants exemption from all kinds of taxes to religious and charitable institutions. C. Because the power to tax is unlimited, comprehensive, plenary and supreme, the power to tax can reach over into any jurisdiction to seize upon person or property. D. The benefits-protection theory is the source of the doctrine of symbiotic relationship.

D. The benefits-protection theory is the source of the doctrine of symbiotic relationship

Which of the following is not correct? A. Taxes may be imposed to raise revenue or to provide disincentives to certain activities within the state B. The state can have the power of taxation even if the constitution does not expressly give it the power to tax. C. For the exercise of the power of taxation, the state can tax anything at any time. D. The power of taxation in the philippine constitution are grants of power and not limitations on taxing powers

D. The power of taxation in the philippine constitution are grants of power and not limitations on taxing powers

Which of the following is not a secondary purpose of taxation? A. To serve as key instrument of social control. B. To effect a more equitable distribution of wealth among people C. To achieve social and economic stability D. To raise revenue to defray the necessary expenses of the government.

D. To raise revenue to defray the necessary expenses of the government

The process by which the sovereign raises income to defray the expenses of the government is called

Taxation