Principles of Taxation (Review) Flashcards
(95 cards)
1
Q
The three fundamental powers of the state may be exercised only by the government
A
FALSE.
Eminent domain may be granted to public service companies.
2
Q
Taxation is a process or means by which the sovereign, through its law-making body raises income to defray the expenses of the government
A
TRUE.
3
Q
Eminent domain may be exercised even by public service corporations and public entities
A
TRUE
4
Q
Police power regulates both liberty and property.
A
TRUE
5
Q
Taxes are raised to cover the cost of governance
A
TRUE
6
Q
Toll is one of the taxes collected by the government
A
FALSE.
Toll is paid for the use of another’s property.
7
Q
License fees are imposed in the exercise of police power
A
TRUE
8
Q
License fee is imposed to raise revenue
A
FALSE.
License fee is imposed for a regulatory purpose
9
Q
Tax is generally unlimited because it is based on the needs of the State.
A
TRUE
10
Q
The amount imposed in the exercise of police power depends on whether the activity is useful or not
A
TRUE
11
Q
The distinction of a tax from permit or license fee is that a tax is one in which there is generally no limit on the amount that may be imposed.
A
TRUE
12
Q
Debt, as distinguished from tax, may be paid in kind
A
TRUE
13
Q
Under the equal protection clause of the constitution, all persons subject to legistlation shall be treated alike under dissimilar circumstances and condtions, both in the privileges conferred and liabilities imposed
A
FALSE.
Persons should be treated alike in similar circumstances.
14
Q
Tax laws are civil and penal in nature because there are penalties provided in the case of violation.
A
FALSE.
Tax laws are not penal in nature
15
Q
Special assessment is a tax.
A
FALSE
Special assessment is a charge imposed on real property (land).
16
Q
Special assessment is imposed on persons, property, and property rights.
A
FALSE
Special assessment is a charge imposed on real proprty (land).
17
Q
The Philippine government may subject the land where embassies of foreign governments are located to real property taxes.
A
FALSE
Principle of International Comity
18
Q
A revenue bill may originate from the Senate and on which the same bill the House of Representatives may propose amendments.
A
FALSE
Revenue bills originate exclusively from the House of Representatives
19
Q
A person may refuse to pay on the ground that he will not receive a benefit from the tax
A
FALSE
20
Q
In the exercise of the power of taxation, the State can tax anything at any time
A
TRUE
21
Q
In cases of deductions and exemptions, doubts shall be resolved liberally in favor of the government
A
TRUE
22
Q
Levying of local government taxes should be exercised only by the legislative branch of the local government
A
TRUE
23
Q
The taxing power of provinces, municipalities and cities precede from a constitutional grant
A
TRUE
24
Q
Taxation is regressive when their rate goes up depending on the resources of the person affected
A
FALSE
In this case, taxation is progressive
25
No law granting any tax exemption shall be passed without the concurrence of 2/3 of all the members of Congress
FALSE
It requires the concurrence of majority of the members of Congress
26
There is no constitutional prohibition against double taxation in the Philippines. It is something not favored, but nevertheless permissible
TRUE
27
"Global system of income taxation" means separate graduated rates are imposed on different types of income
FALSE.
"Schedular system of income taxation"
28
One of the schemes of shifting the incidence of tax burden is by transferring the sales tax of a manufacturer to the distributor, then in turn to the wholesaler, to the retailer and finally to the consumer
TRUE
29
Transformation is a method by which the manufacturer or producer upon whom the tax is imposed pays the tax and strives to recover such expense through lower production cost without sacrificing the quality of his product
TRUE
30
In case of ambiguity, tax laws shall be interpreted liberally in favor of the government.
FALSE.
In favor of the taxpayer
31
Which of the following statements is incorrect?
a. Taxes are the revenues raised in the exercise of the police power of the State
b. One of the special characteristics of tax is it is unlimited in amount
c. The threee fundamental powers of the State are inherent in the State and may be exercised without the need of any constitutional grant
d. All of the above
Taxes are the revenues raised in the exercise of the police power of the State
32
The State, having sovereignty can enforce contributions upon its citizens even without a specific provision in the Constitution authorizing it. Which of the following will justify the foregoing statement?
a. It is so because the State has the supreme power to command and enforce obedience to its will form the people within its jurisdiction
b. Any provision in the Constitution regarding taxation does not create rights for the sovereignty to have the power to tax but it merely constitutes limitations upon the supremacy of tax power
c. Both "a" and "b"
d. Neither "a" nor "b"
Both:
a. It is so because the State has the supreme power to command and enforce obedience to its will form the people within its jurisdiction
b. Any provision in the Constitution regarding taxation does not create rights for the sovereignty to have the power to tax but it merely constitutes limitations upon the supremacy of tax power
33
Statement 1: The distinction of a tax from permit or license fee is that a tax is imposed for regulation
Statement 2: Non-payment of tax does not necessarily render a business illegal
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
FALSE. The distinction of a tax from permit or license fee is that a tax is imposed for regulation.
TRUE. Non-payment of tax does not necessarily render a business illegal.
34
The primary purpose of taxation is to raise revenue for the support of the government. However, taxation is often employed as a devise for regulation by means of which, certain effects or conditions envisioned by the government may be achieved such as:
a. Taxation may be used to provide incentive to greater production through grant of tax exemption
b. Taxation can strengthen weak enterprises by creating conditions conducive to their growth through grant of tax exemptions
c. Taxes may be increased in periods of prosperity to curb spending power and halt inflation or lowered in periods of slump to expand the business and ward off depression
d. All of the above
a. Taxation may be used to provide incentive to greater production through grant of tax exemption
b. Taxation can strengthen weak enterprises by creating conditions conducive to their growth through grant of tax exemptions
c. Taxes may be increased in periods of prosperity to curb spending power and halt inflation or lowered in periods of slump to expand the business and ward off depression
35
Which of the following statements is correct?
a. The purpose of taxation may also be "compensatory", meaning it may be used to make up for the benefit received
b. Taxes may be imposed for the equitable distribution of wealth and income in society.
c. Both "a" and "b"
d. Neither "a" nor "b"
a. The purpose of taxation may also be "compensatory", meaning it may be used to make up for the benefit received
b. Taxes may be imposed for the equitable distribution of wealth and income in society.
36
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 theory
b. Lifeblood theory
c. Sumptuary theory
d. Symbiotic doctrine
Lifeblood theory
37
On theoretical basis of taxation, which of the following statements is true?
a. People pay taxes which their government uses to expand its powers and territorial domination
b. People demand form their govenment certain responsibilities and then provide this government with the means to carry them out
c. State needs taxation to exist, while people must support taxation because they need the presence of the state
d. "b" and "c"
State needs taxation to exist, while people must support taxation because they need the presence of the state
38
Incidence of taxation means:
a. Shifting of tax
b. Refunds of tax
c. Payment of tax
d. Imposition of tax
Payment of tax
39
The actual effort exerted by the government to effect the exaction of what is due from the taxpayer is known as:
a. Assessment
b. Levy
c. Payment
d. Collection
Collection
40
Statement 1: Symbiotic relation is the reason why the government would impose taxes on the income of resident citizens derived from sources outside the Philippines.
Statement 2: Jurisdiction is the reason why citizens must provide support to the state so the latter could continue to give protection.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
FALSE. Symbiotic relation is the reason why the government would impose taxes on the income of resident citizens derived from sources outside the Philippines.
FALSE. Jurisdiction is the reason why citizens must provide support to the state so the latter could continue to provide protection.
41
A law passed by Congress which granted tax amnesty to those who have not paid income taxes for a certain year and at the same time providing for the refund of taxes to those who have already paid them. The law is:
a. Valid because there is a valid classification
b. Not valid because those who did not pay their taxes are favored over those who have paid their taxes
c. Valid because it was Congress that passed the law and it did not improperly delegate the power to tax
d. Not valid because only the President with the approval of the Congress may grant amnesty
Valid because there is a valid classification
42
Congress passed a new law imposing taxes on income earned out of particular acitvity that was not previously taxed. The law, however, taxed income already earned in the fiscal year when the law took effect. Is the law valid?
a. No because the laws are intended to be prospective, not retroactive
b. No, the law is arbitrary in that it taxes income that has already been spent
c. Yes, since the tax laws are the lifeblood of the government
d. Yes, tax laws are an exception; they can be given retroactive effect
Yes, tax laws are an exception; they can be given retroactive effect
43
Due to an uncertainty whether or not a new tax law is applicable to printing companies, ABC Printers submitted a legal query to the BIR on that issue. The BIR issued a ruling that printing companies are not covered by the new law. Relying on this ruling, ABC Printers did not pay the said tax. Subsequently, however, the BIR reversed the ruling and issued a new one stating that the tax covers printing companies. Could the BIR assess ABC Printeres for back taxes corresponding to the years before the new ruling?
a. Yes, because taxation is the rule and exemption is the exception
b. Yes, because taxes are the lifeblood of the government
c. No, the BIR is not allowed to reverse its ruling
d. No, reversal of ruling shall not be given a retroactive application if it will be prejudicial to the taxpayer
No, reversal of ruling shall not be given a retroactive application if it will be prejudicial to the taxpayer
44
The Constitution requires that all revenue bills shall originate "exclusively" from the House of Representatives. Assume that in 2014, Congressman Uro proposed an expansion of the coverage of the value added tax to be known as e-vat law. The proposed bill was approved by the House of Representatives later that year. However, the EVAT version of the Senate became the EVAT law.
Which of the following statements will justify the enacted EVAT law?
I. The Constitution simply means that the initiative of filing revenue, tariff or tax bills must come from the House of Representatives on the theory that, elected as they are from the districts, the Members of the House can be expected to be more sensitive to the local needs and problems
II. It is not the law but the revenue bill which is required by the Constitution to "originate exclusively" in the House of Representatives because a bill originating in the House may undergo such extensive changes in the Senate that the result may be a rewriting of the whole, and a distinct bill may be produced.
Both justify the enacted EVAT Law:
I. The Constitution simply means that the initiative of filing revenue, tariff or tax bills must come from the House of Representatives on the theory that, elected as they are from the districts, the Members of the House can be expected to be more sensitive to the local needs and problems
II. It is not the law but the revenue bill which is required by the Constitution to "originate exclusively" in the House of Representatives because a bill originating in the House may undergo such extensive changes in the Senate that the result may be a rewriting of the whole, and a distinct bill may be produced.
45
The Constitution requires that all revenue bills shall originate "exclusively" from the House of Representatives. Assume that in 2014, Congressman Uro proposed an expansion of the coverage of the value added tax to be known as e-vat law. The proposed bill was approved by the House of Representatives later that year. However, the EVAT version of the Senate became the EVAT law.
Assuming Senatory Bobadilla filed in the Senate a substitute e-vat bill "in anticipation" of its receipt of the bill from the House. The proposal is totally different from the version of the lower house. Which of the following statements will justify the filing of a substitute bill by Honorable Senator Bobadilla?
I. To insist that a revenue statute not only the bill which initiated the legislative process culminating in the enactment of the law - must substantially be the same as the House bill would be to deny the Senate's power not only to " concur with amendments" but also to "propose amendments"
II. It would be to violate the coequality of legislative power of the two houses of Congress and in fact make the House superior to the Senate. Given the power of the Senate to propose amendments, it can propose its own version even with respect to bills which are required by the Constitution to originate in the House
III. Filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the House is not prohibited under the Constitution, so long as the action by the Senate as a body is withheld pending receipt of the House Bill
To insist that a revenue statute not only the bill which initiated the legislative process culminating in the enactment of the law - must substantially be the same as the House bill would be to deny the Senate's power not only to " concur with amendments" but also to "propose amendments"
46
Being legislative in nature, the power to tax may not be delegated, except:
a. To local governments or political subdivisions
b. When allowed by the Constitution
c. When delegation relates merely to administrative implementation that may call for some degree of discretionary powers under a set of sufficient standards expressed by law or implied from the policy and purpose of the Act
d. All of the choices
a. To local governments or political subdivisions
b. When allowed by the Constitution
c. When delegation relates merely to administrative implementation that may call for some degree of discretionary powers under a set of sufficient standards expressed by law or implied from the policy and purpose of the Act
47
Statement 1: The aspects of taxation are shared by the legislative and executive branches of the government
Statement 2: Taxes should be prospective and should not be given retroactive effect because they are burdens.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
True. The aspects of taxation are shared by the legislative and executive branches of the government
False. Taxes should be prospective and should not be given retroactive effect because they are burdens.
48
The power of taxation is basically legislative in character. Which of the following is a legislative function?
a. Fix with certainty the amount of tax
b. Identify who should collect the tax
c. Determine who should be subject to tax
Legislative functions:
a. Fix with certainty the amount of tax
b. Identify who should collect the tax
c. Determine who should be subject to tax
49
As to scope of legislative power to tax, which of the following is correct?
a. The power to tax is supreme, plenary, comprehensive, and without any limit because the existence of the government is a necessity
b. The discretion of Congress in imposing taxes extends to the mode, method, and kind of tax, even if the constitution provides otherwise
c. Congress has the right to levy a tax of any kind at any amount as it sees fit, even in the absence of any constitutional provision
d. The sole arbiter of the purpose for which taxes shall be levied is Congress, provided that the purpose is public and the courts may not review the levy of the tax to determine whether or not the purpose is public
Congress has the right to levy a tax of any kind at any amount as it sees fit, even in the absence of any constitutional provision
50
The following are the aspects of taxation:
I. Levy or imposition of the tax on persons, property, or excises
II. Collection of taxes already levied
III. Sufficiency of government sources to satisfy its expenditure
Aspects of taxation:
I. Levy or imposition of the tax on persons, property, or excises
II. Collection of taxes already levied
51
Which of the following is incorrect?
a. Selecting the kind of tax is a legislative but not administrative function.
b. Fixing the amount of tax is a legislative but not administrative function
c. Prescribing the rules of taxation is a legislative but not administrative function
d. Assessment of the tax liability is a legislative but is not administrative function
Assessment of the tax liability is a legislative but is not administrative function--- FALSE
52
Which of the following is correct?
a. Fixing of tax rates is a legislative and administrative function
b. Valuation of object of tax is a legislative but not administrative function
c. Collection of tax is a legislative but not administrative function
d. Assessment of tax liability is not a legislative but is an administrative function
Assessment of tax liability is not a legislative but is an administrative function---TRUE
53
Statement 1: Inherent powers of the State exist independent of the constitution
Statement 2: The taxing power of the local government units precede from a constitutional grant
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
TRUE. Inherent powers of the State exist independent of the constitution
TRUE. The taxing power of the local government units precede from a constitutional grant
54
The following are the characteristics of the State's power to tax, except:
a. The strongest of all inherent powers of the State
b. Involves power to destroy
c. Both "a" and "b"
d. Neither "a" nor "b"
Characteristics of the State's power to tax:
a. The strongest of all inherent powers of the State
b. Involves power to destroy
55
Levying of local government taxes may be exercised by:
a. The local executive only
b. The legislative branch of the local government only
c. The local executive and the legislative branch of the lcoal govenment unit
d. Neither the local executive nor the legislative branch of the local government can exercise the power
The legislative branch of the local government only
56
Where does taxing power of the provinces, municipalities, and cities precede from?
a. Constitutional grant
b. Legislative enactment
c. Presidential decree or Executive act
d. Local legislation
Constitutional grant
57
Statement 1: Eminent domain may raise money for the government
Statement 2: Barrios, barangays, municipalities/cities and provinces may collect tax from its inhabitants
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
FALSE. Eminent domain may raise money for the government
FALSE. Barrios, barangays, municipalities/cities and provinces may collect tax from its inhabitants
58
The following are the nature of taxation, except:
a. Inherent in sovereignty
b. Essentially a legislative function
c. Subject to inherent and constitutional limitation
d. Subject to the approval of the people
Subject to approval of the people
59
"The power to tax involves power to destroy" means":
a. The power to tax is viewed as the power to destroy in the sense that a lawful tax cannot be defeated just because its exercise would be destructive or would bring about insolvency to a taxpayer
b. The principle implies that an imposition of lawful regulatory taxes would be destructive to the taxpayers and business establishments because the government can compel payment of tax and forfeiture of property through the exercise of police power
c. Both "a" and "b"
d. Neither "a" nor "b"
Both:
a. The power to tax is viewed as the power to destroy in the sens that a lawful tax cannot be defeated just because its exercise would be destructive or would bring about insolvency to a taxpayer
b. The principle implies that an imposition of lawful regulatory taxes would be destructive to the taxpayers and business establishments because the government can compel payment of tax and forfeiture of property through the exercise of police power
60
There can be no tax unless there is a law imposing the tax is consistent with the doctrine of:
a. Uniformity in taxation
b. Due process of law
c. Non-delegation of the power of tax
d. All of the above
Non-delegation of the power of tax
61
"The tax should be based on taxpayer's ability to pay." In relation to this, which of the following is not correct?
a. No person shall be imprisoned for non-payment of tax
b. A graduated tax table is in consonance with this statement
c. As a theory of taxation, this is called the "ability to pay theory"
d. As a basic principle of taxation, this is called "theoretical justice"
No person shall be imprisoned for non-payment of tax
62
The rule of "No estoppel against the government" means:
a. Rule of law that in the performance of its government functions, the state cannot be estopped by the neglect of its agents and officers
b. The government is not estopped by the mistakes or errors of its agents; erroneous application and enforcement of law by public officers do not block the subsequent correct application of the statutes
c. Both "a" and "b"
d. Neither "a" nor "n"
Both:
Rule of law that in the performance of its government funcitons, the state cannot be estopped by the neglect of its agents and officers
b. The government is not estopped by the mistakes or errors of its agents; erroneous application and enforcement of law by public officers do not block the subsequent correct application of the statutes
63
Progressivity of taxation is also mandated in the Constitution.
Statement 1: Our income tax system is one good example of such progressivity because it is built on the principle of the taxpayers' ability to pay
Statement 2: Taxation is progressive when their rate goes up depending on the resources of the person affected.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
TRUE. Our income tax system is one good example of such progressivity because it is built on the principle of the taxpayers' ability to pay
TRUE. Taxation is progressive when their rate goes up depending on the resources of the person affected.
64
One of the characteristics of our internal revenue laws is that they are:
a. Political in nature
b. Penal in nature
c. Generally prospective in operation although the tax statute may nevertheless operate retrospectively provided it is clearly the legislative intent
d. Criminal in nature
Generally prospective in operation although the tax stature may nevertheless operate retrospectively provided it is clearly the legislative intent
65
Which of the following distinguishes tax from license fee?
A. Non-payment does not necessarily render the business illegal
b. A regulatory measure
c. Imposed in exercise of police power
d. Limited to cover cost of regulation
Non-payment does not necessarily render the business illegal
66
The least source of tax laws:
a. Statutes
b. Presidential decrees
c. Revenue regulations
d. Tax treaties or conventions
Revenue regulations
67
Statement 1: A revenue regulation must not be contrary to the provision of the law that it implements
Statement 2: A revenue regulation cannot expand the provision of the law that it implements by imposing a penalty when the law that authorizes the revenue regulation does not impose a penalty
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
TRUE. A revenue regulation must not be contrary to the provision of the law that it implements
TRUE. A revenue regulation cannot expand the provision of the law that it implements by imposing a penalty when the law that authorizes the revenue regulation does not impose a penalty
68
In every case of doubt, tax statutes are construed:
a. Strictly against the government and the taxpayer
b. Liberally in favor of the government and the taxpayer
c. Strictly against the govenment and liberally in favor of the taxpayer
d. Liberally in favor of the government and strictly against the taxpayer
Strictly against the govenment and liberally in favor of the taxpayer
69
In every case of doubt, tax exemptions are construed
a. Strictly against the government and the taxpayer
b. Liberally in favor of the government and the taxpayer
c. Strictly against the government and liberally in favor of the taxpayer
d. Liberally in favor of the government and strictly against the taxpayer
Liberally in favor of the government and strictly against the taxpayer
70
Which of the following statement is correct?
I. A tax cannot be imposed without clear and express words for that purpose
II. The provisions of a taxing act are not to be extended by implication
III. If the law is repealed, taxes assessed before repeal of the law may no longer be collected.
IV. Tax law is ex post facto in application
Correct statements:
I. A tax cannot be imposed without clear and express words for that purpose
II. The provisions of a taxing act are not to be extended by implication
71
Which of the following factors are determinants to the "Situs" of taxation?
I. Nature, kind or classification of the tax being imposed
II. Subject matter of the tax (person, property, rights or activity)
III. Citizenship of the taxpayer
IV. Residence of the taxpayer
V. Place of the excise, privilege, business or occupation
VI. Source of the income subject to tax
I. Nature, kind or classification of the tax being imposed
II. Subject matter of the tax (person, property, rights or activity)
III. Citizenship of the taxpayer
IV. Residence of the taxpayer
V. Place of the excise, privilege, business or occupation
VI. Source of the income subject to tax
72
Tax of a fix amount imposed among all persons residing within a specified territory without regards to their property or occupation they may be engage:
a. Personal, poll or capitation tax
b. Property
c. Excise tax
d. Regressive
Personal, poll or capitation tax
73
Tax of fixed proportion of the amount or value of the property tih respect to which the tax is assessed
a. Ad valorem
b. Specific
c. Excise
d. Regressive
Ad valorem
74
Tax base on a fixed percentage of the amount of property, income or other basis to be taxed
a. Progressive
b. Proportional
c. Regressive
d. Indirect
Proportional
75
Which of the following is a characteristic of taxation which distinguishes it from police power and eminent domain?
a. For public purposes
b. Legislative in nature
c. Generally payable in money
d. Inferior to non-immpairment clause in the Constitution
Generally payable in money
76
The following are basic principles of sound tax system:
I. It should be capable of being effectively enforced
II. It must be progressive
III. Sources of revenue must be sufficient to meet government expenditures and other public needs
IV. It should be exercised to promote public welfare
Basic principle of sound tax system:
I. It should be capable of being effectively enforced
II. It must be progressive
III. Sources of revenue must be sufficient to meet government expenditures and other public needs
77
The sources of revenue should be sufficient to meet the demands of public expenditures. This refers to:
a. Equality or theoretical justice
b. Fiscal adequacy
c. Administrative feasibility
d. Rule of appointment
Fiscal adequacy
78
The tax should be imposed proportionate to the taxpayer ability to pay
a. Equality or theoretical justice
b. Fiscal adequacy
c. Administrative feasibility
d. Rule of apportionment
Equality or theoretical justice
79
The tax law must be capable of convenient, just, and effective administration
a. Equality or theoretical justice
b. Fiscal adequacy
c. Administrative feasibility
d. Rule of apportionment
Administrative feasibility
80
Statement 1: Inherent limitations are the natural restrictions to safeguard and ensure that the power of taxation shall be exercised by the government only for the betterment of the people whose interest should be served, enhanced, and protected
Statement 2: Constitutional limitations are provisions of the fundamental law of the land that restrict the supreme, plenary, unlimited and comprehensive exercised by the State of its inherent power to tax
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
TRUE. Inherent limitations are the natural restrictions to safeguard and ensure that the power of taxation shall be exercised by the government only for the betterment of the people whose interest should be served, enhanced, and protected
TRUE. Constitutional limitations are provisions of the fundamental law of the land that restrict the supreme, plenary, unlimited and comprehensive exercised by the State of its inherent power to tax
81
"Equality in taxation" means
I. Progressive system of taxation shall be applied
II. The tax laws and their application must be fair, just, reasonable and proportionate to one's ability to pay
III. The tax laws shall give emphasis on direct rather than indirect taxes or on the ability-to-pay principle of taxation
I. Progressive system of taxation shall be applied
II. The tax laws and their application must be fair, just, reasonable and proportionate to one's ability to pay
III. The tax laws shall give emphasis on direct rather than indirect taxes or on the ability-to-pay principle of taxation
82
Which of the following statements correctly described "Equal protection" clause of the Constitution regarding the government's power to tax?
I. All persons subject to legislation shall be treated alike under dissimilar circumstances and conditions, both in the privileges conferred and the liabilities imposed
II. The purpose is to protect persons belonging to the same class against intentional and arbitrary discrimination
III. There is denial of equal protection of laws if there is discrimination in the implementation of tax laws
II. The purpose is to protect persons belonging to the same class against intentional and arbitrary discrimination
III. There is denial of equal protection of laws if there is discrimination in the implementation of tax laws
83
Which of the following restrictions on the power of taxation recognizes that the country's tax laws shall not be applied to the property of foreign government?
a. Taxation is inherently a legislative function
b. Exercise of taxation is subject to international comity
c. Due process of law
d. Equal protection of law
Exercise of taxation is subject to international comity
84
There is an inherent limitation on the power of taxation
a. The rule on taxation shall be uniform and equitable
b. No law impairing the obligations of contracts shall be enacted
c. Charitable institutions, churches, personages or conventments, appurtenants thereto, mosques and nonprofit cemeteries and all kinds of lands, buildings and improvements actually, directly and exclusively used for religious or charitable purposes shall be exempt fromt taxation
d. The tax laws cannot apply to the property of foreign governments
The tax laws cannot apply to the property of foreign governments
85
Exemption from tax is a privilege, which is being looked upon by law with disfavor because everyone should be sharing the burden of taxation. On account of this view, exemption from tax is construed strictly against the taxpayer, except in certain situations like:
a. Exemption is granted to the impoverished sector in certain situation
b. Exemption relates to a public official
c. Exemption referes to public property
d. All of the above
Exemption is granted to the impoverished sector in certain situation
86
Tax exemption is made different from tax amnesty:
a. It is a privilege or freedom from tax burden
b. It allows immunity all criminal, civil, and adminstrative liabilities arising from non-payments of taxes
c. Amount foregone by the government is substantial
d. It applies to all past, present and future tax obligations
It is a privilege or freedom from tax burden
87
Statement 1: Tax exemption applies only to government entities that exercise proprietary functions
Statement 2: All government entities regardless of their functions are exempted from taxes because it would be impractical for the government to be taxing itself
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
FALSE. Tax exemption applies only to government entities that exercise proprietary functions
FALSE. All government entities regardless of their functions are exempted from taxes because it would be impractical for the government to be taxing itself
88
Which of the following statements correctly described the tax exemptions of the government?
I. The State cannot be taxed without its consent, otherwise, such is derogation to its sovereignty
II. Tax exemption applies only to governmental entities through which the government immediately and directly exercises its governmental functions like the Department of Justice, Department of Foreign Affairs, Philippine National Police, and the like
III. Government agencies performing government functions are exempt from tax unless expressly taxed, while those performing proprietary functions are subject to tax unless expressly exempted
I. The State cannot be taxed without its consent, otherwise, such is derogation to its sovereignty
II. Tax exemption applies only to governmental entities through which the government immediately and directly exercises its governmental functions like the Department of Justice, Department of Foreign Affairs, Philippine National Police, and the like
III. Government agencies performing government functions are exempt from tax unless expressly taxed, while those performing proprietary functions are subject to tax unless expressly exempted
89
Which of the following is to be regarded as tax minimization through legal means?
a. Not declaring all taxable income
b. Padding of expenses for deduction form income
c. Opting to transfer the property through sale rather than through donation where tax liability would be higher
d. All of the above
Opting to transfer the property through sale rather than through donation where tax liability would be higher
90
Which of the following is correct?
a. Tax avoidance, or tax minimization, through legal means, is not punishable by law
b. Deliberate reduction of taxable income that has been received is an example of tax avoidance
c. Evasion of the tax takes place only when there are no proceeds on the part of the government
d. All of the above
Tax avoidance, or tax minimization, through legal means, is not punishable by law
91
Statement 1: An attempt to minimize one's tax constitute fruad, taxpayer may diminish his liability by any means which the law permits
Statement 2: To avoid is legal but to evade is illegal. The legal rights of the taxpayer to decrease the amount of what otherwise would be his taxes, altogether avoid them, by means which the law permits, cannot be doubted.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
FALSE. An attempt to minimize one's tax constiture fruad, taxpayer may diminish his liability by any means which the law permits
TRUE. To avoid is legal but to evade is illegal. The legal rights of the taxpayer to decrease the amount of what otherwise would be his taxes, altogether avoid them, by means which the law permits, cannot be doubted.
92
Which of the following is an element of double taxation?
I. Same kind of tax
II. Same subject matter
III. Same taxable period
IV. Same taxing authority
I. Same kind of tax
II. Same subject matter
III. Same taxable period
IV. Same taxing authority
93
Double taxation in its general sense means taxing the same subject twice during the same taxing period. In this sense, double taxation:
a. Violates substantive due process
b. Does not violate substantive due process
c. Violates the right to equal protection
d. Does not violate the right to equal protection
Violates the right to equal protection
94
Statement 1: There can be double taxation where the state merely imposes tax on every separate and distinct business in which a person is engaged
Statement 2: There is no objectionable double taxation if the tenements in the city are subjects to real estate tax while the business of leasing said property are also subject to real dealer's tax
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
FALSE. There can be double taxation where the state merely imposes tax on every separate and distinctbusiness in which a person is engaged
TRUE. There is no objectionable double taxation if the tenements in the city are subjects to real estate tax while the business of leasing said property are also subject to real dealer's tax
95
Ligaya Educational Foundation, Inc., a stock educational institution organized for profit, decided to lease for commercial use a 1,500 sq. m. portion of the school. The school actually, directly, and exclusively used the rents for the maintenance of its school buildings, including payment of janitorial services. Is the leased portion subject to real property tax?
a. Yes, since Ligaya is a stock and for-profit educational institution
b. No, since the school actually, directly, and exclusively used the rents for educational purposes
c. No, but it may be subject to income taxation on the rents it receives
d. Yes, since the leased portion is not acutally, directly, and exclusively used for educational purposes
Yes, since Ligaya is a stock and for-profit educational institution
