TAXATION 1 – Income Taxation General Principles of Taxation
1. Taxation as distinguished from from police power and power of of eminent domain. A. Property is taen taen to promote promote the general general welfare. !. "ay#e exercised exercised only #y #y the go$ernment. go$ernment. %. Operates upon the the whole citi&enry citi&enry. D. There is generally no limit as to the amount that may may be imposed. '. The following following are constitutional limitations( limitations( except except A. No imprisonment for non)payment non)payment of poll poll tax. !. Non)impairment of the o#ligation o#ligation of contracts. contracts. %. *ule of uniformity uniformity and e+uity e+uity in taxation. D. Exemption from income tax of charitable institutions, cemeteries, churches, personage or convents appurtenant thereto, as well as all lands, buildings and improvements actually, directly and exclusively used for religious, charitable and educational purposes. ,. -hich of the following statements is correct A. The President is authori&ed to increase or decrease national internal re$enue tax rates. !. One of the nature of taxation is the reciprocal duties of protection protection and support #etween the state and su#/ects thereof. thereof. C. Every sovereign government government has the inherent power to tax. 0. Income tax in an indirect indirect tax. . A tax must #e imposed for pu#lic purpose. purpose. -hich of the the following is not a pu#lic purpose A. National National defense defense !. Pu#lic Pu#lic educat education ion %. Impro$ement of the sugar and coconut industries. industries. D. mprovement mprovement of a subdivision road. 2. -hich is not not an essential essential characteristic of a tax tax !. t is unlimited unlimited as to amount. amount. !. It is paya#le paya#le in money. %. It is proportionate proportionate in character. character. 0. It is an enforced contri#ution. contri#ution.
%. It is not a personal personal lia#ility of the persons persons assessed. 0. It is #ased solely on the #ene5t deri$ed deri$ed #y the owners of the land. land. 6. It is the pri$ilege of not #eing imposed a 5nancial 5nancial o#ligation to which others are su#/ect. A. Tax incenti$e incenti$e ". Tax exemption %. Tax amnesty amnesty 0. Tax credit credit 7. As to scope of the legislati$e power to tax( which is not not correct correct A. -here there there are no constitutional constitutional restrictions( restrictions( and pro$ided pro$ided the su#/ects are are within the territorial /urisdiction of the state( %ongress has unlimited discretion as to the persons( property or occupations to #e taxed. !. In the a#sence a#sence of any constituti constitutional onal prohi#iti prohi#ition( on( %ongress %ongress has the right right to le$y a tax of any amount it sees 5t. %. The discretio discretion n of %ongress %ongress in imposing imposing taxes taxes extends extends to the mode( method method or ind of tax( unless restricted #y the constitution. D. The sole arbiter of the purpose or which taxes shall shall be levied levied is Congress, provided the purpose is public and the courts may not review the levy of the tax to determine whether or not the purpose is public. 8. -hich of the following is a nature nature of taxation !. The power is granted by legislative legislative action. !. It is essentially essentially an administrati$e function. function. %. It is generally paya#le paya#le in money. 0. -ithout it the state can continue continue to exist. 19. -hich of the following is not a determinant of the place of taxation A. 4ource 4ource of the incom income e !. %iti&enship %iti&enship of the taxpayer taxpayer %. *esidence of the taxpayer D. !mount of tax to be imposed imposed 11. -hich of the following statements is not correct A. An inherent inherent limitation limitation of taxation taxation may #e disregar disregarded ded #y the applicati application on of a constitutional limitation. !. The property property of an educatio educational nal institution institution operate operated d #y a religious religious order is exempt from property tax( #ut its income is su#/ect to income tax. C. The prohibition prohibition of of delegation by the state state of the power of taxation will will still allow the "% to modify the rules in time for &ling of returns and payment of taxes. 0. The power of taxation is shared #y the legislati$e and executi$e executi$e departments of the go$ernment.
3. 4pecial assessment is an an enforced proportional contri#ution contri#ution from owners owners of land especially #ene5ted #y pu#lic impro$ement. -hich one of the following i s not considered as one of its 1'. 4tatement 1 – The The point on which which tax is originally originally imposed is impact of taxation. taxation. characteristics 4tatement ' – :minent domain is inferior to non)impairment clause of the A. It is le$ied le$ied on land. land. constitution. 4tatement , – As a rule( taxes are su#/ect to set)o; or compensation. ". t is based on the government#s need of money to support support its legitimate ob$ectives.
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4tatement – As a rule( pro$isions on the $alidity of tax exemptions exemptions are are resol$ed li#erally in fa$or of the taxpayer. A. !. C. 0.
4tat 4tatem emen entt 1 4tat 4tatem emen entt ' 4tat 4tatem emen entt , 4tat 4tatem emen entt True
'1. !asic Principles of a sound tax system( except A.
1,. A tax system where the re$enues are supplied mostly #y indirect taxes. A. 4chedular %. Pr P rogressi$e !. Proport Proportional ional D. %egressive
',. The sources of re$enue as a whole( should #e su>cient to meet the demands of pu#lic expenditures. %. Administr Administrati$e ati$e feasi#ility feasi#ility !. 'iscal ade)uacy !. :+ua :+ualit lity y or theo theore reti tica call /ust /ustic ice e 0. Inte Intelle llect ctua uall sens sensit iti$ i$it ity y
1. A tax system where the greater #ul of the tax re$enues is deri$ed #y direct taxes. A. 4chedu 4chedular lar C. Progress Progressive ive !. Proportional 0. *e * egressi$e
'. The tax laws must #e capa#le of con$enient( /ust and e;ecti$e administration. A.
12. This is an inherent limitation on the power of taxation. A. *ule on uniformity and e+uity e+uity in taxation. !. 0ue process of of law and e+ual e+ual protection of of the laws. %. Non)impairment of the /urisdiction /urisdiction of the 4upreme %ourt %ourt in tax cases. D. Tax must be for the public purpose.
'2. Persons or things #elonging to the same class shall #e taxed at the same rate. A 4impl ic icity in in ta taxation %. :+ual it ity in in taxati on on !. *ecipr *eciprocity ocity in taxation taxation D. *niformity in in taxation
13. This is a constitutional limitation on the power of taxation. A. Tax laws must #e applied within the territorial territorial /urisdiction of the state. !. :xemption of go$ernment go$ernment agencies and and instrumentalities from taxation. taxation. C. (o appropriation appropriation of public money for religious religious purposes. 0. Power to tax cannot cannot #e delegated to pri$ate pri$ate persons or entities. 16. They exist independent of the constitution #eing fundamental powers of the state( except A. Power of taxation %. Power of imminent domain !. Police Police power power D. Power of recall 17. The power to ac+uire pri$ate property upon payment of /ust compensation for pu#lic purpose A. Power Power of taxat taxation ion C. Power of imminent domain !. Po Police power 0. Po Power of recall 18. The power to regulate li#erty and property to promote the general welfare. A. Power of taxation %. Power of imminent domain 0. Power Power of recall recall ". Police Police power '9. The power to demand proportionate contri#utions from persons and property to defray the expenses of the go$ernment. %. Power Power of imminent imminent domain !. Power of of taxation taxation !. Po Police power 0. Po Power of recall
'3. The tax should #e proportional to the relati$e $alue of the property to #e taxed. A 4impli 4implicit city y in taxati taxation on C. E)uality in taxation taxation !. *ecip ecipro roci city ty in taxa taxati tion on 0. ?nif ?nifor ormi mity ty in taxa taxati tion on '6.The following are the nature of taxation( except A. Inherent Inherent in so$ereignt so$ereignty y !. :ssentially legislati$e in character %. 4u#/ect to inherent and and constitutional constitutional limitation D. +ub$ect to approval by the people. people. '7. It literally means @place of taxationB the country that has the power and /urisdiction to le$y and collect the tax. A. !asis of of ta taxation %. 4cope of of ta taxati on on ". +itus of of taxation taxation 0. Theory Theory of taxation taxation '8. The existence of the go$ernment is a necessity and that the state has the right to compel all indi$iduals and property within its limits to contri#ute A. !asis of of ta taxation %. 4cope of of ta taxati on on !. 4itus 4itus of taxatio taxation n D. Theory of taxation ,9. The reciprocal duties of support and protection #etween the people and the go$ernment. %. 4cope 4cope of taxation taxation !. "asis of taxation taxation !. 4itus of of ta taxation 0. Theory of of ta taxation ,1. 4u#/ect to inherent and constitutional limitations( the power of taxation is regarded as
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4tatement – As a rule( pro$isions on the $alidity of tax exemptions exemptions are are resol$ed li#erally in fa$or of the taxpayer. A. !. C. 0.
4tat 4tatem emen entt 1 4tat 4tatem emen entt ' 4tat 4tatem emen entt , 4tat 4tatem emen entt True
'1. !asic Principles of a sound tax system( except A.
1,. A tax system where the re$enues are supplied mostly #y indirect taxes. A. 4chedular %. Pr P rogressi$e !. Proport Proportional ional D. %egressive
',. The sources of re$enue as a whole( should #e su>cient to meet the demands of pu#lic expenditures. %. Administr Administrati$e ati$e feasi#ility feasi#ility !. 'iscal ade)uacy !. :+ua :+ualit lity y or theo theore reti tica call /ust /ustic ice e 0. Inte Intelle llect ctua uall sens sensit iti$ i$it ity y
1. A tax system where the greater #ul of the tax re$enues is deri$ed #y direct taxes. A. 4chedu 4chedular lar C. Progress Progressive ive !. Proportional 0. *e * egressi$e
'. The tax laws must #e capa#le of con$enient( /ust and e;ecti$e administration. A.
12. This is an inherent limitation on the power of taxation. A. *ule on uniformity and e+uity e+uity in taxation. !. 0ue process of of law and e+ual e+ual protection of of the laws. %. Non)impairment of the /urisdiction /urisdiction of the 4upreme %ourt %ourt in tax cases. D. Tax must be for the public purpose.
'2. Persons or things #elonging to the same class shall #e taxed at the same rate. A 4impl ic icity in in ta taxation %. :+ual it ity in in taxati on on !. *ecipr *eciprocity ocity in taxation taxation D. *niformity in in taxation
13. This is a constitutional limitation on the power of taxation. A. Tax laws must #e applied within the territorial territorial /urisdiction of the state. !. :xemption of go$ernment go$ernment agencies and and instrumentalities from taxation. taxation. C. (o appropriation appropriation of public money for religious religious purposes. 0. Power to tax cannot cannot #e delegated to pri$ate pri$ate persons or entities. 16. They exist independent of the constitution #eing fundamental powers of the state( except A. Power of taxation %. Power of imminent domain !. Police Police power power D. Power of recall 17. The power to ac+uire pri$ate property upon payment of /ust compensation for pu#lic purpose A. Power Power of taxat taxation ion C. Power of imminent domain !. Po Police power 0. Po Power of recall 18. The power to regulate li#erty and property to promote the general welfare. A. Power of taxation %. Power of imminent domain 0. Power Power of recall recall ". Police Police power '9. The power to demand proportionate contri#utions from persons and property to defray the expenses of the go$ernment. %. Power Power of imminent imminent domain !. Power of of taxation taxation !. Po Police power 0. Po Power of recall
'3. The tax should #e proportional to the relati$e $alue of the property to #e taxed. A 4impli 4implicit city y in taxati taxation on C. E)uality in taxation taxation !. *ecip ecipro roci city ty in taxa taxati tion on 0. ?nif ?nifor ormi mity ty in taxa taxati tion on '6.The following are the nature of taxation( except A. Inherent Inherent in so$ereignt so$ereignty y !. :ssentially legislati$e in character %. 4u#/ect to inherent and and constitutional constitutional limitation D. +ub$ect to approval by the people. people. '7. It literally means @place of taxationB the country that has the power and /urisdiction to le$y and collect the tax. A. !asis of of ta taxation %. 4cope of of ta taxati on on ". +itus of of taxation taxation 0. Theory Theory of taxation taxation '8. The existence of the go$ernment is a necessity and that the state has the right to compel all indi$iduals and property within its limits to contri#ute A. !asis of of ta taxation %. 4cope of of ta taxati on on !. 4itus 4itus of taxatio taxation n D. Theory of taxation ,9. The reciprocal duties of support and protection #etween the people and the go$ernment. %. 4cope 4cope of taxation taxation !. "asis of taxation taxation !. 4itus of of ta taxation 0. Theory of of ta taxation ,1. 4u#/ect to inherent and constitutional limitations( the power of taxation is regarded as
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supreme( plenary( unlimited and comprehensi$e. A. !asis of taxatio taxation n C. +cope +cope of taxation ! . 4i tu tus of of ta taxati on on 0. Theory of of ta taxation ,'. Our National Internal *e$enue Caws are A. Political in in na nature %. %riminal in in na nature D. Civil in nature !. Penal Penal in natur nature e ,,. The le$ying or i mposition of tax and the collection of the tax are processes which constitute the taxation system. A. !asi s of ta taxation %. Nature of of ta taxati on on 0. Theory Theory of taxation taxation ". !spects of of taxation taxation ,. The process or means #y which the so$ereign( through its law)maing #ody raises income to defray the expenses of the go$ernment. A. Toll oll C. Taxation !. Cicense fee 0. Assessment ,2. :nforced proportional contri#utions contri#utions from persons and property le$ied #y the state #y $irtue of its so$ereignty for the support of the go$ernment and for all pu#lic needs. A. Toll oll C. Taxes !. Cicense fee 0. Assessment ,3. An escape from taxation where the tax #urden is transferred #y the one on whom the tax is imposed or assessed to another. %. Transforma ransformation tion !. +hifting !. :xemption 0. %apitali&ation ,6. An escape from taxation where the producer or manufacturer pays the tax and endea$ors to recoup himself #y impro$ing his process of production there#y turning out his units of products at a lower cost. A. 4hifting C. Transformation ransformation !. :xemption 0. %apitali&ation ,7. An escape from taxation where there there is a reduction in the price of the taxed o#/ect e+ual to the capitali&ed $alue of future taxes which the taxpayer expects to #e called upon to pay. A. 4h 4hifting %. Transformation D. Capitaliation Capitaliation !. :xemp :xemptio tion n ,8. The use of illegal or fraudulent means to a$oid or defeat the payment of tax. A. :xemption %. A$oidance !. 4hifti 4hifting ng D. Evasion Evasion 9. The use of legal or permissi#le means to minimi&e or a$oid taxes.
A. :xemp :xemptio tion n !. 4hifting
C. !voida !voidance nce 0. :$ : $asion
1. 4ynonymous to tax e$asion. e$asion. %. Tax exemption !. Tax dodging !. Tax mi mini mi mi&ati on on 0. Tax e$asi on on '. 4ynonymous to tax a$oidance. A. Tax dodging %. Tax exemption 0. Tax e$asion e$asion ". Tax minimiation ,. In e$ery case of dou#t( tax statutes are construed A. 4trictly against the go$ernment and the taxpayer. taxpayer. !. Ci#erally in fa$or of the go$ernment go$ernment and the taxpayer taxpayer.. C. +trictly against the government and liberally in favor of the taxpayer. taxpayer. 0. Ci#erally in fa$or of the go$ernment and strictly against the taxpayer. taxpayer. . In e$ery case of dou#t( tax exemptions are construed A. 4trictly against the go$ernment and the taxpayer. taxpayer. !. Ci#erally in fa$or of the go$ernment go$ernment and the taxpayer taxpayer.. %. 4trictly against the go$ernment go$ernment and li#erally in fa$or of the the taxpayer. taxpayer. D. -iberally in favor of the government and strictly against the taxpayer. taxpayer. 2. In case of conDict #etween the Tax %ode and the Philippine Accounting 4tandards EPA4F. A. PA4 shall pre$ail pre$ail o$er the Tax %ode. ". Tax Code shall prevail over P!+. %. PA4 and Tax %ode shall #e #oth disregarded. 0. The taxpayer may choose #etween #etween the PA4 or the Tax Tax %ode. . 3. Tax Tax of a 5xed amount imposed upon all persons residing within a speci5ed territory without regard to their property or occupation they may #e engaged. %. :xci :xcise se !. Personal, poll poll or capitation !. Property 0. *egressi$e 6. Tax Tax imposed on personal or real property in proportion to its $alue or on some other reasona#le method of apportionment. A. Pe rs rs on onal ( po pol l or or ca ca pi pi ta ta ti ti on on %. :xci se se 0. *egres *egressi$e si$e ". Property Property 7. Tax Tax imposed upon performance of an act( the en/oyment of pri$ilege or the engaging in an occupation. A. Persona Personal( l( poll or capitation capitation C. Excise Excise !. Pr Property 0. *egressi$e 8. Tax Tax which is demanded from the person whom the law intends or desires to pay it. %. :xci :xcise se !. Direct Direct !. In Indirect 0. Percentage
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29. Tax which is demanded from one person i n the expectation and intention that he shall indemnify himself at the expense of another. A. 0irect %. :xcise 0. Percentage ". ndirect
27. This power is superior to the non)impairment clause and is #roader in application #ecause it is a power to mae and implement laws. A. Power of Taxation %. Power of :minent 0omain !. Power of *ecall D. Police Power
21. Tax which imposes a speci5c s um #y the head or num#er or #y some standard of weight or measurement and which re+uires no assessment other than a listing or classi5cation of the o#/ects to #e taxed. %. :xcise !. +peci&c !. Ad)$alorem 0. Income
28. -hich of the following statements is not correct A. An inherent limitation of taxation may #e disregarded #y the application of a constitutional limitation. !. Income tax lia#ilities shall #e paid #y the inha#itants e$en if foreign in$aders occupy our country. %. Taxes may #e imposed retroacti$ely #y law( #ut unless so expressed #y such law( these taxes must only #e imposed prospecti$ely. D. Tax laws are either political or penal in nature.
2'. Tax of a 5xed proportion of the amount or $alue of the property with respect to which the tax is assessed. A. 4peci5c %. :xcise 0. Percentage ". !dvalorem 2,. Tax #ased on a 5xed percentage of the amount of property( income or other #asis to #e taxed. %. *egressi$e !. Proportional !. Progressi$e 0. Indirect 2. Tax where the rate decreases as the tax #ase increases. A. Proportional C. %egressive !. Progressi$e 0. Indirect 22. Tax where the rate increases as the tax #ase increases. A. Proportional %. *egressi$e 0. Indirect ". Progressive
39. -hich of the following is not a constitutional limi tation on the Power of Taxation A. No person shall #e depri$ed of life ( li#erty or property without due process of law. !. No person shall #e denied the e+ual protection of the law. C. (o person shall be imprisoned for debt or nonpayment of tax. 0. No law granting any tax exemption shall #e passed without the concurrence of a ma/ority of all the mem#ers of %ongress. 31. The distinction of a tax from permit or license fee is that a tax isG A. Imposed for regulation. !. One which in$ol$es an exercise of police power. C. 0ne in which there is generally no limit on the amount that maybe imposed. 0. Cimited to the cost of regulation.
3'. Police power as distinguished from the power of eminent domainG 23. -hich of the following statements is not correct A. Hust compensation is recei$ed #y the owner of the property. A. Tax #urdens shall neither #e imposed nor presumed to #e imposed #eyond !. "ay#e exercised #y pri$ate indi$iduals. what the statute expressly and clearly states #ecause tax statutes should #e C. 1ay regulate both liberty and property. construed strictly against the go$ernment. 0. Property is taen #y the go$ernment for pu#lic purpose. !. Tax exemptions( tax amnesty tax condonations and their e+ui$alent pro$isions are not presumed and( when granted are strictly construed against the 3,. A tax wherein #oth the incidence of or the lia#ility for the payment of the tax as taxpayer #ecause such pro$isions are highly disfa$ored #y the go$ernment. well as the %. :xemptions from taxation are highly disfa$ored in law and he who claims tax #urden of the tax falls on the same person. exemption must #e a#le to /ustify his claim or right. %. Indirect tax !. Direct tax D. The /ouse of %epresentatives has the duty and the exclusive power of !. alue added tax 0. Percentage tax constructing and interpreting tax laws. 3. -hich one of the following is not a characteristic or element of a tax 26. The strongest of all inherent powers of the state #ecause without it( the A. It is an enforced contri#ution. go$ernment can !. It is legislati$e in character. neither sur$i$e nor dispense any of its other powers and functions e;ecti$ely. %. It is #ased on the a#ility to pay. A. Police Power C. Power of Taxation D. t is payable in money or in 2ind. ! . Pow er of :mi ne nt 0 om ai n 0 . Po we r o f *e cal l
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32. Tax as distinguished from license feesG A. Cimited to co$er cost of regulation. !. A regulatory measure. C. (onpayment does not necessarily render the business illegal. 0. Imposed in the exercise of police power. 33. The power of taxation is exercised #y A. The President %. !ureau of Internal *e$enue !. The 4upreme %ourt D. Congress
!. A re$enue raising measure %. Imposed in the exercise of taxing power. D. -imited to cover cost of regulation. 6,. alue)added tax is an example ofG A. Jraduated tax %. *egressi$e tax !. Progressi$e tax D. Proportional tax
36. One of the characteristics of internal re$enue laws is that they areG A. %ri mi nal in nature %. Pol itical in nature !. Penal in nature D. Generally prospective in application.
6. -hich tax principle is descri#ed in the statement @ the more income earned #y the taxpayer( the more tax he has to pay. A.
37. -hich of the following is not an example of excise taxG A. Transfer tax C. %eal property tax !. 4ales tax 0. Income tax
62. The most superior and l east limita#le among the fundamental powers of the stateG A. Power of recall %. Power of taxation 0. Power of eminent domain ". Police power
38. The following are similarities of the inherent power of taxation( eminent domain( and police power( except oneG A. Are necessary attri#utes of so$ereignty ". +uperior to the nonimpairment clause of the constitution. %. %ompensation is recei$ed. 0. Are legislati$e in character.
63. One of the characteristics of a tax is thatG A. It is generally #ased on contact. ". t is generally payable in money. %. It is generally assigna#le. 0. It is generally su#/ect to compensation.
69. -hich of the following is not a scheme of shifting the incidence of taxation A. The manufacturer transfers the tax to the consumer #y adding the tax to the selling price of the goods soldB !. The purchaser ass for a discount or refuse to #uy at regular prices unless it is reduced #y the amount e+ual to the tax he will payB C. Changing the terms of the sale li2e '0" shipping point in the Philippines to '0" destination abroad, so that the title passes abroad instead of in the Philippines3 0. The manufacturer transfers the sales tax to the distri#utor( then in turn to the wholesaler( in turn to the retailer and 5nally to the consumer.
61. -hich of the following statements is not correct A. Taxes may #e imposed to raise re$enues or to pro$ide disincenti$es to certain acti$ities within the stateB !. The state can ha$e the power of taxation e$en if the %onstitution does not expressly gi$e it the power to tax. %.
66. The following are the characteristics of our internal re$enue laws exceptG !. Political in nature. !. %i$il in nature. %. Jenerally prospecti$e in application. 0. "ay operate retrospecti$ely if congress so pro$ides. 67. -hich of the following has no power of taxation A. Pro$inces %. !arangays !. %ities D. "arrios 68. -hich of the following statements is wrong A re$enue #illG A. "ust originate from the Kouse of *epresentati$es and on which same #ill the 4enate may propose amendments. ". 1ay originate from the +enate and on which same bill the /ouse of %epresentatives may propose amendments. %. may ha$e a Kouse $ersion and a 4enate $ersion appro$ed separately( and then consolidated( with #oth houses appro$ing the consolidation $ersion. 0. "ay #e recommended #y the President to %ongress. 79. Tax as distinguished from special assessmentG A. not as a personal lia#ility of the person assessed. !. #ased wholly on #ene5ts %. exceptional as to time and place D. based on necessity and is to raise revenues 71. ?nder this #asic principle of a sound tax system( the Jo$ernment should not i ncur a de5citG
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A. Theoretical /ustice C. 'iscal !de)uacy !. Administrati$e feasi#ility 0. ?niformity in taxation 7'. -hich of the following may not raise money for the go$ernment A. Power of taxation C. Eminent Domain !. Police power 0. C icense fee 7,. No person shall #e imprisoned for non)payment of thisG A. :xcise tax %. Income tax !. alue added tax D. Poll tax 7. This is a demand of ownershipG A. Cicense fee C. Toll !. Tax 0. %ustoms duties 72. Income tax is generally regarded as %. a property tax !. an excise tax !. a tax on persons 0. tax on pro5ts 73. -hich of the following is not accepta#le for legally refusing to pay the tax A. That the right of the state to collect the tax has prescri#ed. !. That there is no /urisdiction to collect the tax. %. That the tax law was declared as unconstitutional. D. That there is no bene&t derived from the tax. 76. It is important to now the source of income for income tax purposes( i.e. from within or without the Philippines #ecause A. The Philippines imposes income tax on income from sources within and without of a non)resident citi&en. !. 4ome indi$idual taxpayers are citi&ens while others are aliens. %. 4eparate graduated rates are imposed on di;erent types of income. D. +ome taxpayers are taxed on their worldwide income while others are taxable only upon income from sources within the Phils. 77 .A law granting tax exemption re+uires the concurrence of !. 1a$ority vote of members of congress !. 'L, $ote of mem#ers of %ongress. %. ,L $ote of mem#ers of %ongress. 0. ?nanimous $ote of mem#ers of %ongress. 78. No person shall #e imprisoned for de#t or non)payment of poll tax. This is aEanF A. I nhe re nt li mi ta ti on % . I nt erna ti on al l im it ati on 0. Territorial limitation ". Constitutional limitation 89. The 0epartment of cers entered into a contract with foreign in$estors granting them exemption from all forms of taxes to encourage in$estments in the Phils. The contract is A. oid( unless the President rati5es
". 4oid, because the power to grant tax exemption is vested in Congress. %. alid( if the President has authori&ed the o>cers to enter into such contract. 0. alid( #ecause the purpose is to promote pu#lic welfare.
81. Tax as distinguished from de#t A. no imprisonment for non)payment%. #ased on contract !. may #e paid in ind D. based on law 8'. %ongress can impose a tax at any amount and at anytime shows that A. Taxation is an inherent power of the state. !. Taxation is essentially a legislati$e power. C. Taxation is a very broad power of the state. 0. Taxation is #ased on taxpayers= a#ility to pay. 8,. The amount re+uired is dictated #y the needs of the go$ernment inG A. Cicense fee %. Toll 0. 0e#ts ". Tax 8. A charge imposed on land for special #ene5ts deri$ed resulting from pu#lic impro$ements. A. Tax %. Cicense !. Toll D. +pecial assessment 82. -hich of the following are National Internal *e$enue Taxes I. Income tax III. 0 onor=s tax . Other percentage tax II. :state tax I.alue Added tax I. :xcise Tax II . 0ocumentary stamp tax A. I( II( III( I !. I( II( III( I(
83. The !ureau of Internal *e$enue shall ha$e a chief and four EF assistant chiefs to #e nown as A. 4ecretary and Assistant 4ecretaries !. 4ecretary and ?ndersecretaries %. %ommissioner and Assistant %ommissioners D. Commissioners and Deputy Commissioners 86. The three fundamental powers of the state are I. Inherent in the state and may #e exercised #y the state without need of any constitutional grant. II. Not only necessary #ut indispensa#le. !. True3 True !. TrueB false
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87. The three fundamental powers of the state are I. "ethods #y which the state interfere with pri$ate rights.
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II
:xercised primarily #y the legislature.
!. True3 True !. TrueB false
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88. I. Police power regulates #oth li#erty and property while the power of eminent domain and the power of taxation a;ect only property rights. II Police power and the power of taxation may #e exercised only #y the go$ernment while the power of eminent domain may #e exercised #y some pri$ate entities. %.
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191. I. The point on which a tax is originally imposed is impact of taxation. II. The point on which a tax #urden 5nally rests or settles down is incidence of taxation. !. True3 True !. TrueB false
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19'. I. Police power is superior to the non)impairment clause of the constitution. II. Power of taxation is superior to the non)impairment clause of the constitution. A. TrueB True ". True3 false
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19,. I. No person shall #e imprisoned for de#t or non)payment of tax. II. Tax laws are ci$il and penal in nature #ecause there are penalties pro$ided in case of $iolation. A. TrueB True !. TrueB false
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19. I. Tax may #e collected in an unlimited amount. II. Cicense fee may #e collected in an unlimited amount.
A. TrueB True ". True3 false
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192. I. Tax is imposed to raise re$enue. II. Cicense fee is imposed to raise re$enue. A. TrueB True %.
I. Tax is a demand of so$ereignty. II. Toll is a demand of so$ereignt y.
A. TrueB True ". True3 false
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196. I Tax is imposed on persons( property( and property rights. II. 4pecial assessment is imposed on persons( property( and property rights. A. TrueB True ". True3 false
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197. I. %ollection of tax is a legislati$e act. II. Imposition of tax is an administrati$e act. A. TrueB True !. TrueB false
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198. I. A state has the power to tax e$en if not granted #y the constitution. II. A state cannot exercise police power if not granted #y the constitution. A. TrueB True %.
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111. I. 0ue process of law in taxation under the constitution is a grant of power. II. Pro$isions in the Philippine constitution on taxation are grants of power. A. TrueB True !. TrueB false
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11'. I. In the Philippines( there may #e dou#le taxation. II. Taxation may #e used to implement the police power of the state. !. True3 True !. TrueB false
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11,. I. Cicense fee is a charge imposed under police power. II. 4pecial assessment is le$ied on lands only. !. True3 True !. TrueB false
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11. I. Tax is imposed regardless of pu#lic impro$ement. II. 4pecial assessment is imposed regardless of pu#lic impro$ements. A. TrueB True ". True3 false
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112. I. Tax a$oidance is the use #y the taxpayer of legal or fraudulent means to a$oid or defeat taxes. II. Tax e$asion is the use #y the taxpayer of illegal or fraudulent means to a$oid or defeat taxes. A. TrueB True !. TrueB false
C. 'alse3 true 0.
113. I. One of the essential characteristics of a tax is it is unlimited in amount. II. A tax is generally unlimited #ecause it is #ased on the needs of the state. A. TrueB True !. TrueB false
C. 'alse3 true 0.
116. I. The power of taxation is inherent in so$ereignty #eing essential to the existence of e$ery go$ernment. Kence( e$en if not mentioned in the constitution the state can still exercise the power and is essentially a legislati$e function. II. :$en in the a#sence of any constitutional pro$ision( taxation power falls to %ongress as part of the general power of law)maing. !. True3 True !. TrueB false
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117. I. The President has the power to $eto a re$enue #ill e$en if such #ill was already appro$ed #y %ongress. II. The President is superior to %ongress as heLshe can $eto any #ill e$en if already appro$ed #y %ongress. A. TrueB True ". True3 false
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(D4D*!- T!5P!6E%+
1. The National Internal *e$enue %ode of 1877 is A. *A 8,,6 !. %A 33 %. *A 829 D. %! 7898 '. -hich of the following statements is not correct A. An indi$idual citi&ens of the Philippines who is woring and deri$ing income from a#road as an o$erseas contract worer is taxa#le on income from sources within and without the Philippines. !. A seaman who is a citi&en of the Philippines and who recei$es compensation for ser$ices rendered a#road as a mem#er of the complement of $essel engaged exclusi$ely in international trade shall #e treated as a resident citi&en. %. A non) resident citi&en who is not engaged in #usiness in the Philippines is treated as non)resident alien who is not engaged in #usiness in the Philippines D. !n alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources in the Philippines ,. -hich of the following statements is not correct A. In the case of married indi$iduals( where only one of the spouses is deri$ing gross income( only such spouse shall #e allowed the personal exemption. ! In the case of married indi$iduals( the additional exemptions may#e claimed #y only one of the spouses %. As a rule( the hus#and shall #e the head of the family and proper claimant of the additional exemption D. n the case of legally separated spouses, additional exemption maybe claimed by the spouses who has custody of the children but shall not exceed four:8; for each spouse . A resident citi&en is taxa#le on all income deri$ed from sources A. -ithin the Philippines only !. -ithout the Philippines only %. Partly within and partly without D.
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6. A non)resident alien is taxa#le on all income deri$ed from sources !. .A citi&en of the Phils. who wors and deri$es income from a#road is a resident if he stayed outside the Phils. A.
exemption A. *ecogni&ed natural son who cele#rated his '1st #irthday during the taxa#le year. !. Cegitimate natural son( '1 years old who got married on 0ecem#er ,1( of the year. %. Cegally adopted son( '1 years old son who #ecame employed 0ecem#er ,9( of the taxa#le year. D.
13. "r. A with a dependent minor legitimate child #ecame a widower in Hanuary of '998. In , >>> D. Taxable income from within the Phils. 16. A Jerman citi&en residing in Jermany( married is doing #usiness in the Phils. Kis 1'. A citi&en of a foreign country is considered a non)resident alien engaged in country #usiness in the allow non) resident days 0. , >>> 1,. -hich of the following dependents is not +uali5ed to entitle a taxpayer additional persona
17. -hich of the enumerated taxpayers #elow can claim personal exemption only if there exist a reciprocity clauseLlaw #etween the Philippines and his countryL
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A. !. %. D.
Non)resident *esident alien Non)resident alien not engaged in #usiness in the Philippines (onresident alien engaged in business in the Philippines
18. A legally married couple had the following data in year '9919 A. Two +uali5ed legitimate dependent children !. Two dependent nephews %. One illegitimate child of hus#and 0. One of legitimate child died in 0ecem#er '919 :. !oth spouses are gainfully employed.
'9. A( who #ecame a widower in
0. P62( 999
'1. A married( earned P''2( 999 Enet of P9( 999 wLtaxF compensation income from employment from Huly to 0ecem#er '919. Ke has a legally adopted child as +uali5ed dependent and paid P,(999 as health and hospitali&ation insurance premiums. ''. ?sing the preceding num#er( his personal and additional exemption is A. P9( 999 %. P66(99 0. P67(999 ". PB@, >>> ',. -hich of the following indi$idual taxpayers cannot a$ail of the allowed deductions for health and hospitali&ation insurance premiums A. Non)*esident citi&en !. *esident alien %. Non)resident alien engaged in #usiness in the Phil. D. (onresident alien not engaged in business in the Phil. '. Taxa#le on income from all sources within and without the Phil.
0. Non)resident
'2. Taxa#le only on income from sources within the Phil. except %. *esident alien !. %esident citien !. Non)resident citi&en alien
0. Non)resident
'6. :xemption which is determined according to the status of the taxpayer !. Personal exemption !. Additional :xemption %. Optional standard deduction 0. 4pecial additional personal exemption '7. :xemptions allowed #ased on presence of +uali5ed dependent children A. Personal exemption ". !dditional Exemption %. Optional standard deduction 0. 4pecial additional personal exemption
Two legitimate children *ecogni&ed natural child with current common law wife ! ( h is com mon law wi fe Illegitimate child with another woman
The total #asic personal and additional exemption in '998 isG A. =@>, >>> !. P199( 999 %. P1'2( 999
%. *esident alien
'3. "ay not claim personal exemption A. Non)resident citi&en !. Non)resident alien engaged in trade or #usiness in the Phil. ?nder certain conditions %. *esident alien D. (onresident alien who stayed in the Phil. 'or =B@ days
The claima#le personal and additional exemptions of the coupleG A. K)P 29( 999( -)P 1'2( 999 !. K)P 199(999( -)P 29( 999 C. /P =>>, >>>, <P B@, >>> 0. K)P 129( 999( -)P 29( 999
A. !. %. 0.
!. %esident citien !. Non)resident citi&en alien
'8. -ill not +ualify as dependent A. Cegitimate child !. !rother
%. "other
D. (ephew
,9. Personal exemption( if single A. P'9( 999 !. P'2( 999
%. P,'( 999
D. P@>, >>>
,1. Personal exemption( if married #ut /udicially declared as legally separated with no dependent. D. P@>, >>> A. P'9( 999 !. P'2( 999 %. P,'( 999 ,'. Personal exemption( if married #ut li$ing separately without /udicial decree of separation A. P'9( 999 !. P'2( 999 %. P,'( 999 D. P@>, >>> ,,. Personal exemption( if married #ut /udicially declared as legally separated with dependent A. P'9( 999 !. P'2( 999 %. P,'( 999 D. P@>, >>> ,. Personal exemption( if head of the family A. P'9( 999 !. P'2( 999 %. P,'( 999
D. P@>, >>>
,2. Amount of additional exemption each +uali5ed dependent child is
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A. P7( 999
!. P199( 999
%. P29( 999
D. P9@, >>>
,3. The num#er of dependent children who will +ualify for additional exemption purposes shall not exceed. A. , children %. 2 children 0. 3 children ". 8 children
". /usband and wife shall be treated as separate taxable units and each shall be allowed to claim personal exemption %. If the gross income does not exceed P'9( 999( a special additional personal exemption of P( 999 may #e claimed #y the taxpayer. 0. Kus#and and wife shall #e treated as separate taxa#le units and shall #e allowed to claim only one personal exemption either for the hus#and or wife at their option.
,6. An unmarried or legally s eparated man or woman with one or #oth parents( or with one more #rothers and sisters( or with one or more legitimate( illegitimate( or legally adopted children 1. !. The term @chief support means more than one)half of the re+uirements for li$ing with and dependent upon him or her for their chief support( where such support #rothers( or ". If two children contri#ute e+ual amounts for the support of dependent( neither sisters( or children( regardless of age are incapa#le of self)support #ecause of one of them mental physical may #e +ualify as head of the family defect. !. True( false %.
!. "arried
%. 4ingle
D. /ead of the
,7. A non)resident alien is deemed doing #usiness in the Phil. If he A. Is an indi$idual whose residence is within the Phil. !. Is an indi$idual whose father or mother is an alien who is engaged in #usiness in the Phil. %. Is an indi$idual who is naturali&ed in accordance with law D. +hall come to the Phil. !nd stay therein for an aggregate period of more than =7> days during a calendar year. ,8. One is not correct A. If the taxpayer marries during the taxa#le year( he may claim the personal exemption in full as a married person for such year. !. If the taxpayer dies during the taxa#le year( his estate may still claim the personal and additional exemption for himself and his dependents as if he died at the close of such year. %. If the spouse of the taxpayer or any of the dependents dies during the taxa#le year( the taxpayer may still claim the same exemptions as if death occurred at the close of such year. D. f the taxpayer should have additional dependent children during the taxable year, he can always claim the additional exemptions for such year. 9. One is correct A. -here #oth hus#and and wife recei$e compensation income( the additional exemption shall #e claimed #y wife unless she explicitly wai$es her right in fa$or of her hus#and in the withholding exemption certi5cate.
'. !. If any of the +uali5ed dependents #ecomes '1 years old during the taxa#le year( the taxpayer may claim the same exemptions as if such dependent #ecame '1 years old at the close of such year. ". Parents li$ing with and dependent upon the taxpayer for their support regardless of their age will +ualify as dependents ! True, true !. True( false %.
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