Chapter 2

Question 1

This is any law that arises from the exercise of the taxation power of the State.

Answer 1

Taxation law

Question 2

What are the two types of taxation laws?

Answer 2

Tax laws
Tax exemption law

Question 3

These are laws that provide for the assessment and collection of taxes.

Answer 3

Tax laws

Question 4

These are laws that grant certain immunity from taxation.

Answer 4

Tax exemption laws

Question 5

What is the nature of tax laws? Penal or civil?

Answer 5

Civil

Question 6

In what domain of law do tax laws fall under?

Answer 6

Public law

Question 7

This is the supreme law of the land.

Answer 7

Constitution

Question 8

Does the constitution impose any tax liability?

Answer 8

No

Question 9

If the constitution does not impose any tax liability, what does it provide?

Answer 9

The grant of taxation power and the limitations in the exercise of the same.

Question 10

These provides restrictions to the power of the President, limits taxation power of LGUs and specifically imposes taxes.

Answer 10

Statutes

Question 11

Under what clause of statutes limits the taxation power of the President?

Answer 11

Flexible Tariff Clause

Question 12

This source of taxation law is in the form of Revenue Regulations and Department Orders.

Answer 12

Issuance by the Secretary of Finance

Question 13

This source of taxation law is issues by the Commissioner of Internal Revenue. It is in the form of RMOs, RMCs, RAOs, etc.

Answer 13

Administrative Issuances

Question 14

This source of taxation law empowers the LGU to impose taxes. It is local in nature.

Answer 14

Tax Ordinances

Question 15

This source of taxation law is a bilateral agreement between two sates and it is to reconcile the national fiscal legislations of the contracting parties in order to help avoid simultaneous tax liabilities in two different jurisdictions.

Answer 15

Tax Treaties

Question 16

These are issuances signed by the Secretary of Finance upon recommendation of the Commissioner of Internal Revenue that specify, prescribe, or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code and related statutes.

Answer 16

Revenue Regulations

Question 17

These are formal pronouncements intended to clarify or explain the tax law and carry into effect its general provisions.

Answer 17

Revenue Regulations

Question 18

These are issuances that provide directives or instructions; prescribe guidelines, and outline processes, operations, activities, and methods necessary in the implementation of stated policies and programs of the Bureau in all areas of operations except auditing.

Answer 18

Revenue Memorandum Orders

Question 19

These are rulings, opinions, and interpretations of the CIR with respect to the provisions of the Tax Code and other tax laws as applied to a specific set of facts, with or without established precedents.

Answer 19

Revenue Memorandum Rulings

Question 20

What is the area of operations that is not under RMOs?

Answer 20

Auditing

Question 21

Can BIR Rulings contravene duly issued RMRs?

Answer 21

No, these Ruling are then null and void ab initio.

Question 22

These are issuances that publish pertinent and applicable portions as well as amplifications of laws, rules, regulations, and precedents issued by the BIR and other agencies/offices.

Answer 22

Revenue Memorandum Circulars (RMCs)

Question 23

These refer to periodic issuances, notices, and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue’s position on certain specific issues of law or administration in relation to the provisions of the Tax Code.

Answer 23

Revenue Bulletins

Question 24

These are official positions of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.

Answer 24

BIR Rulings

Question 25

These are merely advisory or a sort of information service to the taxpayer such that none of them is binding except to the addressee and may be reversed by the BIR at anytime.

Answer 25

Rulings

Question 26

Are GAAP laws?

Answer 26

NO these are mere conventions of financial reporting

Question 27

Are Philippine tax laws political in nature?

Answer 27

No

Question 28

Can tax be paid in non-monetary terms?

Answer 28

Yes, in limited circumstances

Question 29

This is a tax imposed for general purpose.

Answer 29

Fiscal or revenue tax

Question 30

This is a tax imposed to regulate business, conduct, and transactions.

Answer 30

Regulatory Tax

Question 31

This is a tax levied to achieve some social or economic objectives

Answer 31

Sumptuary tax

Question 32

This is a tax on persons who are residents of a particular territory

Answer 32

Personal, poll, or capitation tax

Question 33

This is a tax on real or personal properties

Answer 33

Property taxes

Question 34

This is a tax imposed upon the performance of and enjoyment of a privilege or engagement in an occupation.

Answer 34

Excise or privilege tax

Question 35

This is the kind of tax where both the impact and incidence of taxation rest upon the same taxpayer. Here, the tax is collected from the person who is intended to pay the same. The statutory taxpayer is the economic taxpayer in this case.

Answer 35

Direct tax

Question 36

This is the kind of tax where it is paid by any person other than the one who is intended to pay the same. Here, the statutory taxpayer is not the economic taxpayer.

Answer 36

Indirect Tax

Question 37

This is the person named by law to pay the tax

Answer 37

Statutory taxpayer

Question 38

This is the one who actually pays the tax

Answer 38

Economic taxpayer

Question 39

This is a tax of a fixed amount imposed on a per unit basis such as per kilo, liter, or meter.

Answer 39

Specific tax

Question 40

This is a tax of a fixed proportion imposed upon the value of the tax object

Answer 40

Ad valorem

Question 41

This is a flat or fixed tax rate. This kind of tax emphasizes equality by taxing the same rate without the regard to taxpayers' ability to pay.

Answer 41

Proportional tax

Question 42

This is a tax which imposes increasing rates as the tax base increase.

Answer 42

Progressive tax or graduated tax

Question 43

This tax imposes decreasing tax rates as the tax base increase. It directly violates the Consistutional guarantee of progressive taxation.

Answer 43

Regressive tax

Question 44

This tax manifest tax rates which is a combination of any of the above types of tax.

Answer 44

Mixed tax

Question 45

This is a tax imposed by the national government.

Answer 45

National tax

Question 46

This is tax on annual income, gains, or profits.

Answer 46

Income tax

Question 47

This tax on gratuitous transfer of properties by a decedent upon death.

Answer 47

Estate tax

Question 48

This tax on gratuitous transfer of properties by a living donor.

Answer 48

Donor's tax

Question 49

This is consumption tax collected by VAT business taxpayers.

Answer 49

Value Added Tax

Question 50

This is consumption tax collected by non-VAT business taxpayers.

Answer 50

Other percentage tax

Question 51

This is tax on sin products and non-essential commodities such as alcohol, cigarettes and metallic minerals.

Answer 51

Excise tax

Question 52

This is a tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto.

Answer 52

Documentary stamp tax

Question 53

This is tax imposed by the municipal or local government.

Answer 53

Local tax

Question 54

What are examples of local tax?

Answer 54

Professional taxes Real property taxes Business taxes, fees, and charges

Question 55

This refers to the initial burden of the tax. It occurs at the point of imposition and falls upon the person from whom the tax is collected under the law. It cannot be shifted.

Answer 55

Impact of tax (Liability)

Question 56

This refers to the ultimate burden of the tax. It occurs at the point of settlement and rests on the person who pays it eventually. It can be shifted.

Answer 56

Incidence of tax (Burden)

Question 57

This emanates from police power and is imposed to regulate the exercise of a privilege such as the commencement of a business or a profession. It is a pre-activity imposition as opposed to tax which is a post-activity imposition.

Answer 57

License fee

Question 58

This is a charge for the use of other's property.

Answer 58

Toll

Question 59

This is levied by the government on lands adjacent to a public improvement.

Answer 59

Special Assessment

Question 60

This is the amount imposed on imported or exported commodities.

Answer 60

Tariff

Question 61

This is an amount imposed to discourage an act.

Answer 61

Penalty

Question 62

This refers to the methods or schemes of imposing, assessing, and collecting taxes. It includes all the tax laws and regulations.

Answer 62

Tax system,

Question 63

This tax system emphasizes direct taxes which cannot be shifted. It encourages economic efficiency as it leaves no other resort to taxpayers than to be efficient.

Answer 63

Progressive System

Question 64

This tax system is one that emphasizes indirect taxes. Here, the impact of taxation rests upon the bottom end of the society.

Answer 64

Regressive system

Question 65

In this collection system, the payor of the income withholds or deducts the tax on the income before releasing the same to the payee and remits the same to the government.

Answer 65

Withholding system on income tax

Question 66

Here, an estimated tax required by the government to be withheld by employers against the compensation income to their employees.

Answer 66

Withholding tax on compensation

Question 67

Here, an estimated tax required by the government to be deducted on certain income payments made by taxpayers engaged in business.

Answer 67

Expanded withholding tax

Question 68

This is a system of tax collection wherein payers are required to deduct the full tax on certain income payments. This is intended for the collection of taxes from income with high risk of non-compliance.

Answer 68

Final withholding tax

Question 69

In this system, the taxpayer himself determines his income, reports the same through income tax returns and pays the tax to the government

Answer 69

Self-assessment method or voluntary compliance system

Question 70

In this system, the government identifies non-compliant taxpayers, assesses their tax dues and demands for taxpayers' voluntary compliance or enforces collections by coercive means.

Answer 70

Assessment or enforcement system

Question 71

According to him, the governments should adhere to the principles of a sound tax system.

Answer 71

Adam Smith

Question 72

What are the principles of a sound tax system?

Answer 72

Fiscal adequacy Theoretical justice Administrative feasibility

Question 73

This requires that sources of government funds must be sufficient to cover government costs.

Answer 73

Fiscal adequacy

Question 74

This suggests that taxation should consider the taxpayer's ability to pay. It suggest that the exercise of taxation should not be oppressive, unjust, or confiscatory.

Answer 74

Theoretical justice

Question 75

This suggests that tax laws should be capable of efficient and effective administration to encourage compliance.

Answer 75

Adminsitrative feasibility

Question 76

Does the non-compliance of tax systems to the principles of a sound tax system make the system or the laws under it null and void?

Answer 76

No. These are only guides not requisites

Question 77

This refers tot he management of the tax system.

Answer 77

Tax administration

Question 78

To which is the tax administration of the national tax system in the Philippines entrusted to?

Answer 78

The Bureau of Internal Revenue under the supervision and administration of the Department of Finance