Preliminary Examination Flashcards by Rochelle Joy A. Macayan

The power to acquire private property upon payment of just compensation for public purpose

a. Power of taxation
b. Police power
c. Power of eminent domain
d. Power of recall

ANSWER: c. Power of eminent domain

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The power to regulate liberty and property to promote the general welfare

a. Power of taxation
b. Police power
c. Power of eminent domain
d. Super power

ANSWER: b. Police power

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The power to demand proportionate contributions from persons and property to defray the expenses of the government

a. Power of taxation
b. Police power
c. Power of eminent domain
d. National power

ANSWER: a. Power of taxation

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Basic principles of a sound tax system, except

a. Fiscal adequacy
b. Equality or theoretical justice
c. Administrative feasibility
d. Intellectual sensitivity

ANSWER: d. Intellectual sensitivity

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The tax imposed should be proportionate to the taxpayer’s ability to pay

a. Fiscal adequacy
b. Theoretical justice
c. Administrative feasibility
d. Economic consistency

ANSWER: b. Theoretical justice

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The source of revenue as a whole should be sufficient to meet the demands of public expenditures

a. Fiscal adequacy
b. Equality or theoretical justice
c. Administrative feasibility
d. Internal acceptability

ANSWER: a. Fiscal adequacy

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The tax laws must be capable of convenient, just, and effective administration

a. Fiscal adequacy
b. Equality or theoretical justice
c. Administrative feasibility
d. Internal acceptability

ANSWER: c. Administrative feasibility

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The principal purpose of taxation is

a. To encourage the growth of home industries through the proper use of tax exemption and tax incentives
b. To implement the police power of the state
c. To reduce excessive inequalities of wealth
d. To raise revenues for government needs

ANSWER: d. To raise revenues for government needs

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The aspects of taxation is

a. Legislative in character
b. Executive in character
c. Shared by the legislative and executive departments
d. Judicial in character

ANSWER: a. Legislative in character

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This is an inherent limitation on the power of taxation

a. Rule on uniformity and equity in taxation
b. Due process of law and equal protection of the law
c. Non-impairment of the jurisdiction of the Supreme Court in tax cases
d. Tax must be for public purpose

d. Tax must be for public purpose

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This is a constitutional limitation on the power of taxation

a. Tax laws must be applied within the territorial jurisdiction of the state
b. Exemption of government agencies and instrumentalities from taxation
c. No appropriation of public money for religious purposes
d. Power to tax cannot be delegated to private persons or entities

ANSWER: c. No appropriation of public money for religious purposes

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Which of the following statements is correct?

a. The President is authorized to increase or decrease national internal revenue tax rates
b. One of the nature of taxation is the reciprocal duties of protection and support between the state and subject thereof
c. Every sovereign government has inherent power to tax
d. Income tax is an indirect tax

ANSWER: c. Every sovereign government has inherent power to tax

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Persons or things belonging to the same class shall be taxed at the same rate

a. Simplicity in taxation
b. Reciprocity in taxation
c. Equality in taxation
d. Uniformity in taxation

ANSWER: d. Uniformity in taxation

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The tax should be proportional to the relative value of the property to be taxed

a. Simplicity in taxation
b. Reciprocity in taxation
c. Equality in taxation
d. Uniformity in taxation

ANSWER: c. Equality in taxation

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The following are the nature of taxation, except

a. Inherent in sovereignty
b. Essential legislative in character
c. Subject to inherent and constitutional limitations
d. Subject to approval by the people

ANSWER: d. Subject to approval by the people

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The existence of the government is a necessity and that the state has the right to compel all individuals and property within its limit to contribute

a. Basis of taxation
b. Situs of taxation
c. Scope of taxation
d. Theory of taxation

d. Theory of taxation

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The reciprocal duties of support and protection between the people and the government

a. Basis of taxation
b. Situs of taxation
c. Scope of taxation
d. Theory of taxation

a. Basis of taxation

It is the privilege of not being imposed a financial obligation to which others are subject

a. Tax incentive
b. Tax exemption
c. Tax amnesty
d. Tax credit

ANSWER: b. Tax exemption

As to the scope of the legislative power to tax, which is incorrect?

a. Where there are no constitutional restrictions, and provided the subjects are within the territorial jurisdiction of the state, Congress has unlimited discretion as to the persons, property, or occupations to be taxed
b. In the absence of any constitutional prohibition, the House of Representatives has the right to levy a tax of any amount it sees fit
c. The discretion of Congress in imposing taxes extends to the mode, method, or kind of tax even if restricted by the Constitution
d. The sole arbiter of the purpose for which taxes are levied is Congress, provided the purpose is public, but the courts may review the levy of the tax to determine whether or not the purpose is public

ANSWER: c. The discretion of Congress in imposing taxes extends to the mode, method, or kind of tax even if restricted by the Constitution

Which of the following is a nature of taxation?

a. The power is exercised by legislative action
b. It is essentially an administrative function
c. Residence of the taxpayer
d. Amount of tax to be imposed

ANSWER: a. The power is exercised by legislative action

Which of the following is not a determinant of the place of taxation?

a. Source of the income
b. Citizenship of the taxpayer
c. Residence of the taxpayer
d. Amount of tax to be imposed

ANSWER: d. Amount of tax to be imposed

Subject to inherent and constitutional limitations, the power of taxation is regarded as supreme, plenary, unlimited, and comprehensive

a. Basis of taxation
b. Situs of taxation
c. Scope of taxation
d. Theory of taxation

ANSWER: c. Scope of taxation

Our national Internal Revenue Laws are

a. Political in nature
b. Penal in nature
c. Criminal in nature
d. Civil in nature

ANSWER: d. Civil in nature

The process or means by which the sovereign, through its lawmaking body, raises income to defray the expenses of the government

a. Toll
b. License fee
c. Taxation
d. Assessment

ANSWER: c. Taxation

Enforced proportional contributions from persons and property levied by the state by virtue of its sovereignty for the support of the government and for all public needs a. Toll b. License fee c. Taxes d. Assessment

ANSWER: c. Taxes

The use of illegal or fraudulent means to avoid or defeat the payment of tax a. Exemption b. Shifting c. Avoidance d. Evasion

ANSWER: d. Evasion

The use of legal or permissible means to minimize or avoid taxes a. Exemption b. Shifting c. Avoidance d. Evasion

ANSWER: c. Avoidance

In case of conflict between the Tax Code and the Philippine Accounting Standard (PAS) a. PAS shall prevail over the Tax Code b. PAS and the Tax Code shall both be disregarded c. Tax Code shall prevail over PAS d. The taxpayer may choose between the two

b. PAS and the Tax Code shall both be disregarded

Tax which is demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another a. Direct b. Indirect c. Excise d. Percentage

ANSWER: b. Indirect

Under this basic principle of a sound tax system, the government should not incur a deficit a. Theoretical justice b. Administrative feasibility c. Fiscal adequacy d. Uniformity in taxation

ANSWER: c. Fiscal adequacy

Which of the following is not acceptable for legally refusing to pay tax? a. That the right of the state to collect the tax has prescribed b. That there is no jurisdiction to collect the tax c. That the tax law was declared unconstitutional d. That there is no benefit derived from the tax

ANSWER: d. That there is no benefit derived from the tax

The Department of Finance, through its officers, entered into a contract with foreign investors granting them exemption from all forms of taxes to encourage investments in the Philippines. The contract is a. Void, unless the President ratifies it b. Void, because the power to grant tax exemption is vested in Congress c. Valid, if the President has authorized the officers to enter into such a contract d. Valid, because the purpose is to promote public welfare

ANSWER: b. Void, because the power to grant tax exemption is vested in Congress

Tax as distinguished from debt a. No imprisonment for non-payment b. May be paid in kind c. Based on contract d. Based on law

ANSWER: a. No imprisonment for non-payment

Congress can impose a tax at any amount and at any time, which shows that a. Taxation is an inherent power of the state b. Taxation is essentially a legislative power c. Taxation is a very broad power of the state d. Taxation is based on taxpayers’ ability to pay

c. Taxation is a very broad power of the state

The BIR shall be under the control and supervision of the a. Court of Tax Appeals b. Supreme Court c. DILG d. Department of Finance

ANSWER: d. Department of Finance

The three fundamental powers of the state are: I. Inherent in the state and may be exercised by the state without need of any constitutional grant II. Not necessary but indispensable a. True, true b. True, false c. False, true d. False, false

a. True, true

The three fundamental powers of the state are: I. Methods by which the state interferes with private rights II. Exercised primarily by the legislature a. True, true b. True, false c. False, true d. False, false

ANSWER: a. True, true

I. The President has the power to veto a revenue bill even if such a bill was already approved by Congress. II. The President is superior to Congress as he/she can veto any bill even if already approved by Congress. a. True, true b. True, false c. False, true d. False, false

ANSWER: b. True, false

Which is usually an employee? a. A director who is at the same time the chief executive officer b. A director regularly receiving a retainer's fee c. Consultant d. A hired TV program talent

ANSWER: a. A director who is at the same time the chief executive officer

A citizen of the Philippines who works abroad and whose employment requires him to be physically present abroad most of the time during the taxable year is a. Taxable on income within and without the Philippines b. Taxable on income from without the Philippines c. Exempt from income tax d. Taxable on income from within the Philippines

ANSWER: d. Taxable on income from within the Philippines

Which of the following individual taxpayers is taxed on income from sources within and without the Philippines? a. Resident citizen b. Resident alien c. Non-resident citizen d. Non-resident alien

ANSWER: a. Resident citizen