income tax

Question 1

it may be defined as a State power, a legislative process, and a mode of government cost distribution.

Answer 1

Taxation

Question 2

this mutuality support between the people and the government is referred to as the___

Answer 2

basis of taxation

Question 3

this theory presupposes that the more benefit one receives from the government, the more taxes he should pay.

Answer 3

benefit received theory

Question 4

this theory presupposes that taxpayers should be required to contribute based on their relative capacity to sacrifice for the support of the government.

Answer 4

ability to pay theory

Question 5

this aspects of the ability to pay theory proposes that the extent of one’s ability to pay is directly proportional to the level of his tax base. it is a gross concept.

Answer 5

vertical equity

Question 6

this aspects of the ability to pay theory requires consideration of the particular circumstance of the taxpayer. it is a net concept.

Answer 6

horizontal equity

Question 7

this inherent power of the state to enforce proportional contribution from its subjects to sustain itself.

Answer 7

taxation power

Question 8

it is the general power of the state to enact laws to protect the well-being of the people.

Answer 8

police power

Question 9

it is the power of the State to take private property for public use after paying just compensation.

Answer 9

eminent domain

Question 10

what are the stages of the exercise of taxation power

Answer 10

1. levy or imposition
2. assessment and collection

Question 11

it is the place of taxation

Answer 11

situs

Question 12

in this doctrine it states that “the power to tax involves the power to destroy”

Answer 12

marshall doctrine

Question 13

it occurs when the same taxpayer is taxed twice by the same tax jurisdiction for the same thing.

Answer 13

double taxation

Question 14

also known as tax dodging , refers to any act or trick that tends to illegally reduce or avoid the payment of tax.

Answer 14

tax evasion

Question 15

also known a tax minimization, refers to any act or trick that reduces or totally escapes taxes by any legally permissible means.

Answer 15

tax avoidance

Question 16

also known as tax holiday, refers to the immunity, privilege or freedom from being subject to a tax which others are subject to.

Answer 16

tax exemption

Question 17

this type of administrative issuances are signed by the Secretary of Finance upon recommendation of the Commissioner of Internal Revenue

Answer 17

Revenue Regulations

Question 18

this type of administrative issuances are formal pronouncements intended to clarify or explain the tax law and carry into effect its general provisions by providing details of administration and procedure.

Answer 18

Revenue regulations

Question 19

are issuances that provide directives or instructions

Answer 19

revenue memorandum orders

Question 20

this type of administrative issuances are rulings, opinions and interpretations of the CIR

Answer 20

revenue memorandum rulings

Question 21

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

Answer 21

BIR Rulings

Question 22

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

Answer 22

specific tax

Question 23

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

Answer 23

ad valorem

Question 24

tax on annual income, gains or profits

Answer 24

income tax

Question 25

tax on gratuitous transfer of properties by a decedent upon death

Answer 25

estate tax

Question 26

tax on gratuitous transfer of properties by a living donor

Answer 26

donor’s tax

Question 27

consumption tax collected by VAT business taxpayers

Answer 27

Value added tax

Question 28

consumption tax collected by non-VAT business taxpayers

Answer 28

other percentage tax

Question 29

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

Answer 29

excise tax

Question 30

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

Answer 30

documentary stamp tax

Question 31

it refers to the methods or schemes of imposing, assessing, and collecting taxes.

Answer 31

tax system

Question 32

the ___ that increases net worth is income subject to income tax

return on capital
return of capital

Answer 32

return on capital

Question 33

it merely maintains net worth; hence, it is not taxable

Answer 33

return of capital

Question 34

what are the three income taxation schemes under the NIRC?

Answer 34

final income taxation
capital gains taxation
regular income taxation

Question 35

what is initial payment?

Answer 35

total payments by the buyer, in cash or property, in the taxable year the sale was made.

Question 36

what is selling price

Answer 36

entire amount for which the buyer is obligated to the seller.

Question 37

what is contract price?

Answer 37

amount receivable in cash or other property from the buyer

Question 38

how you compute the ratio of initial payment?

Answer 38

(cash downpayment + first installment) / Selling Price

Question 39

how to compute the gross income?

Answer 39

(collection/contract price) x gross profit

Question 40

how to compute contract price with indebtedness assumed buy the buyer?

Answer 40

Selling Price - mortgage assume by the buyer

Question 41

the depreciated value of the leasehold improvement is computed as

Answer 41

(excess useful life over lease term/useful life of the improvement) x cost of improvement

Question 42

differences of tax and revenue

Answer 42

the amount imposed is tax but the amount collected is revenue

Question 43

it emanates from police power and is imposed to regulate the exercise of a privilege such as the commencement of a business or a profession.

Answer 43

license fee

Question 44

it is imposed after the commencement of a business or profession. it is a post-activity imposition

Answer 44

taxes

Question 45

it is imposed before engagement in those activities. it is a pre-activity imposition.

Answer 45

license fee

Question 46

it is a charge for the use of other’s property; hence, it is a demand of ownership.

Answer 46

toll