PRELIMS

Question 1

Annakin, a French citizen permanently residing in the Philippines, received several items during the taxable year.

Which among the following is NOT subject to Philippine income taxation?

a. Consultancy fees received for designing a computer program and installing the same in the Shanghai facility of a Chinese firm.

b. Interest from his deposits in a local bank of foreign currency earned abroad converted to Philippine pesos.

c. 60% of the dividends received from an American corporation which derived 60% of its annual gross receipts from the Philippine sources for the past 3 years.

d. Gains derived from the sale of his condominium unit located in The Fort, Taguig City to another resident alien.

Answer 1

a. Consultancy fees received for designing a computer program and installing the same in the Shanghai facility of a Chinese firm.

Question 2

Noah Reed, a Canadian, arrived in the Philippines on January 1, 2018 and continued to live and engage in business in the Philippines. He went on a tour of India and Pakistan from April 1 to November 5, 2018. He returned to the Philippines on November 6, 2018 and stayed until April 15, 2019 when he returned to Quebec, Canada.

From his investments in the Philippines, he earned a gross income of P2.5 million. For the year 2018, Noah’s taxable status is that of

a. A non-resident alien not engaged in trade or business in the Philippines.

b. A non-resident alien engaged in trade or business in the Philippines.

c. A resident alien not engaged in trade or business in the Philippines.

d. A resident alien engaged in trade or business in the Philippines.

Answer 2

a. A non-resident alien not engaged in trade or business in the Philippines.

Question 3

Which of the following is not correct?

A non-resident citizen means, a citizen of the Philippines

a. Who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein.

b. Who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent basis.

c. Who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year.

d. Who has been previously considered a non-resident citizen and who arrives in the Philippines at any time during the taxable year to reside permanently in the Philippines and who is treated as a non-resident citizen with respect to his income derived from sources abroad for the entire taxable year.

Answer 3

d. Who has been previously considered a non-resident citizen and who arrives in the Philippines at any time during the taxable year to reside permanently in the Philippines and who is treated as a non-resident citizen with respect to his income derived from sources abroad for the entire taxable year.

Question 4

4. Which of the following statement is not correct?

a. An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the Philippines,

b. A seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade shall be treated as a non-resident citizen.

c. A non-resident citizen who is not engaged in business in the Philippines is treated as a non- resident alien who is not engaged in business in the Philippines,

d. An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines.

Answer 4

c. A non-resident citizen who is not engaged in business in the Philippines is treated as a non- resident alien who is not engaged in business in the Philippines,

Question 5

A citizen of the Philippines who works and derives income from abroad is a resident citizen if he stayed outside the Philippines

a. For less than 180 days
b. For more than 180 days
c. For 183 days or more
d. For less than 183 days

Answer 5

d. For less than 183 days

Question 6

A citizen of a foreign country is considered a non-resident alien engaged in business in the Philippines if he stayed inside the Philippines

a. For 183 days or more
b. For less than 183 days
c. For more than 180 days
d. For less than 180 days

Answer 6

c. For more than 180 days

Question 7

A resident citizen is taxable on all income derived from sources

a. Within the Philippines only
b. Without the Philippines only
c. Partly within and partly without
d. Within and without the Philippines

Answer 7

d. Within and without the Philippines

Question 8

A non-resident citizen (NRC), resident alien (RA), and non-resident alien (NRA) are taxable on all income derived from sources

a. Within the Philippines
b. Without the Philippines
c. Partly within and partly without
d. Within and without the Philippines

Answer 8

a. Within the Philippines

Question 9

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 income from without the Philippines
c. Exempt from the income tax
d. Taxable on income from within the Philippines

Answer 9

d. Taxable on income from within the Philippines

Question 10

A non-resident alien is deemed doing business in the Philippines if he

a. Is an individual whose residence is within the Philippines.
b. Is an individual whose father or mother is an alien who is engaged in business in the Philippines.
c. Is an individual who is naturalized in accordance with law.
d. Shall come to the Philippines and stay therein for an aggregate period of more than 180 days during a calendar year.

Answer 10

d. Shall come to the Philippines and stay therein for an aggregate period of more than 180 days during a calendar year.

Question 11

In his first year of business, Manny Durugas did not derive any income nor any gain as he had not yet started operations of his on-line store. However, he was assessed a deficiency tax by the BIR. The BIR found that he overstated its pre-operating expenses, some of which were unsubstantiated.

Should such disallowed expenses give rise to income tax?

(a) Yes, he should not have overstated his expenses in the first place increasing his deductions in the process.

(b) No. In order for income tax to be imposed, 3 elements should be present: (1) there must be gain or profit; (2) the gain or profit is realized or received, actually or constructively; and (3) such gain or profit is not exempted by law or treaty from income tax. In this case, no income tax shall be imposed in the absence of the first 2 elements above.

(c) All of the above.

(d) None of the above.

Answer 11

(b) No. In order for income tax to be imposed, 3 elements should be present: (1) there must be gain or profit; (2) the gain or profit is realized or received, actually or constructively; and (3) such gain or profit is not exempted by law or treaty from income tax. In this case, no income tax shall be imposed in the absence of the first 2 elements above.

Question 12

In 2018, Nelia Gomez, an MWE, received from her employer an annual minimum wage salary of P99,702. Aside from this, she also received P8,000 for holiday pay, overtime pay, and night shift differential pay. Furthermore, she received P8,303 as her 13 month pay.

What amounts shall she be taxable on?

a. P8,000
b. P107,702
c. P8,303
d. None

Answer 12

D. None

Question 13

Nelia in the immediately preceding number was promoted in June 2018, and starting the same month was given a raise in salary which was more than the statutory minimum wage.

Will her entire compensation during 2018 be taxable and subject to withholding tax?

a. Yes. Her entire earnings shall be taxable
b. No. Her entire earnings shall not be taxable
c. Only her earnings from June 2018 to December 2018 shall be taxable and subject to withholding tax
d. None of the above

Answer 13

c. Only her earnings from June 2018 to December 2018 shall be taxable and subject to withholding tax

Question 14

Virginia Pecson is an MWE working in Quezon City. As such, her employer did not withhold any tax from her compensation. In addition to her Statutory Minimum Wage (SMW), she also earned a one- time commission from her employer in September of taxable year 2018.

In what months of the taxable year shall her employer withhold income tax from her SMW?

(a) When she received the commission in September, she ceased to be an MWE. Her employer shall withhold income taxes from her compensation (which includes the SMW) received in the months of September thru December 2018

(b) None. Her employer may not withhold income taxes from the SMW she received in all the 12 months of 2018. Her employer shall withhold the CWT only from the commission she received in September 2018

(c) In all the months of 2018

(d) None of the above

Answer 14

(b) None. Her employer may not withhold income taxes from the SMW she received in all the 12 months of 2018. Her employer shall withhold the CWT only from the commission she received in September 2018

Question 15

Mario is a minimum wage earner (“MWE”) employed in a fast food restaurant in Metro Manila. Aside from this, he also earns income from the operation of a small “barbeque stand” in front of his house.

What should be included in his taxable income for the year?

(a) His taxable income shall include his entire salary earned from the fast food restaurant, and the income from his barbeque stand

(b) His taxable income shall include only his income from the barbeque stand. As far as his minimum wage is concerned, Mario is still an MWE who is entitled to exemption as such

(c) Both his minimum wages and his income from his business shall be exempt from tax

(d) None of the above

Answer 15

(b) His taxable income shall include only his income from the barbeque stand. As far as his minimum wage is concerned, Mario is still an MWE who is entitled to exemption as such

Question 16

Angelo Bato is an MWE employed with the Philippine National Police. He was assigned in the National Capital Region from January 1, 2018 to April 30, 2018, earning the SMW of P492 per day. Beginning May 1, 2018, he was transferred to PNP-Region V, receiving the same rate of $492 per day. The SMW in Region V for the period May 2018 to December 2018 was just P450 per day.

Should PNP-Region V withhold tax from the salary of Angelo?

a) I don’t know

b) No. He is considered an MWE for the entire year

c) Yes. His daily wage rate is above the prevailing SMW in Region V which makes it taxable and subject to withholding

d) None of the above

Answer 16

c) Yes. His daily wage rate is above the prevailing SMW in Region V which makes it taxable and subject to withholding

Question 17

Mr. Gigolo (resident citizen) appoints the Trust Department of Tyra Bank to manage his money pursuant to a trust agreement. The Trust Department proceeds to invest the money in a 5-year corporate bond.

If Mr. Gigolo withdraws his money from the trust account after 8 years, the interest income from the corporate bond is:

a) Exempt from income tax
b) Subject to the 20% final tax
c) All of the above
d) None of the above

Answer 17

b) Subject to the 20% final tax

Question 18

If instead, the bank in the immediately preceding number, in the name of Mr. Gigolo, invests the money in a 20-year long-term investment certificate issued by Bank of Ruptcy, will the interest income therefrom be exempt from income tax?

a) Yes, regardless of the holding periods of Mr. Gigolo and the trust

b) Yes, provided the holding period of Mr. Gigolo and the holding period of the trust in the LT investment certificate are both at least 5 years

c) All of the above

d) None of the above

Answer 18

b) Yes, provided the holding period of Mr. Gigolo and the holding period of the trust in the LT investment certificate are both at least 5 years

Question 19

A Corporation declared and distributed to its stockholder shares of B Corporation. One of its stockholders, W, received 100 shares of B Corporation shares as dividends. At the date of dividend declaration, the fair market value of B Corporation shares was P120 per share and by the time W received the dividend, the fair market value per share was P180.

Which of the following is correct? The dividend is

a. A stock dividend, hence exempt from tax

b. A property dividend, hence part of taxable income of W

c. A property dividend, hence subject to final tax based on its fair market value of P120 per share at the time of declaration.

d. A property dividend, hence subject to final tax based on its fair market value of P180 per share

Answer 19

c. A property dividend, hence subject to final tax based on its fair market value of P120 per share at the time of declaration

Question 20

All of the following statements are correct, except one. Which is the exception?

a. The source of interest income is the country where the debtor resides,

b. The source of dividend income is the country where the corporation was incorporated,

c. Rents are considered derived from the country where the property is located.

d. Income from personal services is considered derived from the country where the services were rendered.

Answer 20

b. The source of dividend income is the country where the corporation was incorporated

Question 21

I. A gain from sale of shares of a domestic corporation shall be considered derived from the Philippines regardless of where the shares were sold.

II. A gain from sale of shares of a foreign corporation shall be considered derived from the country where the corporation was created or organized.

Answer 21

A. True, True

Question 22

The principal purpose of taxation is

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

Answer 22

D. To raise revenues for governmental needs

Question 23

The aspects of taxation are

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

Answer 23

C. Shared by the legislative and executive departments

Question 24

Taxation as distinguished from police power and power of eminent domain

a. Property is taken to promote the general welfare
b. May be exercised only by the government
c. Operates upon the whole citizenry
d. There is generally no limit as to the amount that may be imposed

Answer 24

D. There is generally no limit as to the amount that may be imposed

Question 25

Which of the inherent powers may be exercised even by public service corporations and public entities

a. Power of taxation
b. Police power
c. Power of eminent domain
d. A and C

Answer 25

c. Power of eminent domain

Question 26

Which of the following statements is correct?

a. Income tax is an indirect tax.

b. Our National Internal Revenue Laws are criminal in nature.

c. The theory of taxation states that the power of taxation is supreme, plenary, unlimited, and comprehensive.

d. Taxation is subject to inherent and constitutional limitations.

Answer 26

D. Taxation is subject to inherent and constitutional limitations

Question 27

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 laws

c. Non-impairment of the jurisdiction of the Supreme Court in tax cases

d. Tax must be for public purpose

Answer 27

d. Tax must be for public purpose

Question 28

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 28

c. No appropriation of public money for religious purposes

Question 29

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 love

Answer 29

c. Power of eminent domain

Question 30

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

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

Answer 30

a. Police power

Question 31

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

a. Fiscal adequacy
b. Equality or theoretical justice
c. Administrative feasibility
d. Economic consistency

Answer 31

b. Equality or theoretical justice

Question 32

The sources 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. Revenue generation

Answer 32

a. Fiscal adequacy

Question 33

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

a. Fiscal adequacy
b. Equality or theoretical justice
c. Administrative feasibility
d. Psychological compatability

Answer 33

c. Administrative feasibility

Question 34

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. Asessment

Answer 34

c. Taxes

Question 35

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 35

d. Uniformity in taxation

Question 36

Which is not an essential characteristic of a tax?

a. It is unlimited as to amount
b. It is payable in money
c. It is proportionate in character
d. It is an enforced contribution

Answer 36

a. It is unlimited as to amount

Question 37

**Special assessment is an enforced proportional contribution from owners of land especially benefited by the public improvement.

Which one of the following is not considered as one of its characteristics?**

a. It is levied on land

b. It is based on the government’s need of money to support its legitimate objectives

c. It is not a personal liability of the persons assessed

d. It is based solely on the benefit derived by the owners of the land

Answer 37

b. It is based on the government’s need of money to support its legitimate objectives

Question 38

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 38

b. Tax exemption

Question 39

As to scope of the legislative power to tax, which is not correct?

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, if not restricted by the constitution.

d. The sole arbiter of the purpose for which taxes shall be levied is the Commissioner of Internal Revenue (CIR), provided the purpose is public. However, the courts may review the levy of the tax to determine whether or not the purpose is public.

Answer 39

d. The sole arbiter of the purpose for which taxes shall be levied is the Commissioner of Internal Revenue (CIR), provided the purpose is public. However, the courts may review the levy of the tax to determine whether or not the purpose is public.

Question 40

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. It is generally payable in money

d. The state can exist without it

Answer 40

a. The power is exercised by legislative action

Question 41

The use of illegal or fraudulent means to avoid or defeat the payment of tax

a. Shifting
b. Exemption
c. Avoidance
d. Evasion

Answer 41

D. Evasion

Question 42

The use of legal or permissible means to minimize or avoid taxes

a. Shifting
b. Exemption
c. Avoidance
d. Evasion

Answer 42

c. Avoidance

Question 43

Synonymous to tax evasion

a. Tax dodging
b. Tax minimization
c. Tax exemption
d. Tax shield

Answer 43

a. Tax dodging

Question 44

Synonymous to tax avoidance

a. Tax dodging
b. Tax minimization
c. Tax exemption
d. Tax evasion

Answer 44

b. Tax minimization

Question 45

In 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 government and liberally in favor of the taxpayer

d. Liberally in favor of the government and strictly against the taxpayer

Answer 45

c. Strictly against the government and liberally in favor of the taxpayer

Question 46

In 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

Answer 46

d. Liberally in favor of the government and strictly against the taxpayer

Question 47

In case of conflict between the Tax Code and the Philippine Accounting Standards (PAS)

a. PAS shall prevail over the Tax Code

b. Tax Code shall prevail over PAS

c. PAS and Tax Code shall be both disregarded

d. The taxpayer may choose between the PAS or the Tax Code

Answer 47

B. Tax Code shall prevail over PAS

Question 48

Tax of a fixed amount imposed upon all persons residing within a specified territory without regard to their property, income, or occupation they may be engaged in

a. Personal, poll or capitation
b. Property
c. Excise
d. Regressive

Answer 48

a. Personal, poll or capitation

Question 49

Tax imposed on personal or real property in proportion to its value or on some other reasonable method of apportionment

a. Personal, poll or capitation
b. Property
c. Excise
d. Regressive

Answer 49

b. Property

Question 50

Tax imposed upon the performance of an act, the enjoyment of privilege or the engaging in an occupation.

a. Personal, poll or capitation
b. Property
c. Excise
d. Progressive

Answer 50

c. Excise

Question 51

Tax which is demanded from the person whom the law intends or desires to pay it

a. Direct
b. Indirect
c. Excise
d. Income

Answer 51

a. Direct

Question 52

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. Property
d. Income

Answer 52

b. Indirect

Question 53

Tax which imposes a specific sum by the head or number or by some standard of weight or measurement and which requires no assessment other than a listing or classification of the objects to be taxed

a. Specific
b. Ad-valorem
c. Excise
d. Income

Answer 53

a. Specific

Question 54

Tax of a fixed proportion of the amount or value of the property with respect to which the tax is assessed

a. Specific
b. Ad-valorem
c. Excise
d. Percentage

Answer 54

b. Ad-valorem

Question 55

Tax based on a fixed percentage of the amount of property, income or other basis to be taxed

a. Proportional
b. Progressive
c. Regressive
d. Indirect

Answer 55

a. Proportional

Question 56

Tax where the rate decreases as the tax base increases

a. Proportional
b. Progressive
c. Regressive
d. Indirect

Answer 56

c. Regressive

Question 57

Tax where the rate increases as the tax base increases

a. Proportional
b. Progressive
c. Regressive
d. Indirect

Answer 57

b. Progressive

Question 58

Which of the following statements is not correct?

a. Tax burdens shall neither be imposed nor presumed to be imposed beyond what the statute expressly and clearly states because tax statutes should be construed strictly against the government.

b. Tax exemptions, tax amnesty, tax condonations and their equivalent provisions are not presumed and, when granted, are strictly construed against the taxpayer because such provisions are highly disfavored by the government.

c. Exemptions from taxation are highly disfavored in law and he who claims tax exemption must be able to justify his claim or right.

d. The Bureau of Internal Revenue has the duty and the exclusive power of enacting, implementing and interpreting tax laws.

Answer 58

d. The Bureau of Internal Revenue has the duty and the exclusive power of enacting, implementing and interpreting tax laws.

Question 59

The strongest of all inherent powers of the state because without it, the government can neither survive nor dispense any of its other powers and functions effectively.

a. Police Power
b. Power of Eminent Domain
c. Power of Taxation
d. Power of Greystone

Answer 59

c. Power of Taxation

Question 60

This power is superior to the non-impairment clause and is broader in application because it is the power to make and implement the laws.

a. Power of Taxation
b. Power of Recall
c. Power of Eminent Domain
d. Police Power

Answer 60

d. Polic Power

Question 61

Which of the following statements is not correct?

a. An inherent limitation of taxation may be disregarded by the application of a constitutional limitation.

b. Income tax liabilities shall be paid by the inhabitants even if foreign invaders occupy our country.

c. Taxes may be imposed retroactively by law, but unless so expressed by such law, these taxes must only be imposed prospectively.

d. Tax laws are either political or penal in nature.

Answer 61

d. Tax laws are either political or penal in nature.

Question 62

Which of the following is not a constitutional limitation on the Power of Taxation?

a. No person shall be deprived of life, liberty or property without due process of law.

b. No person shall be denied the equal protection of the law.

c. No person shall be imprisoned for debt or non-payment of tax, poll tax

d. No law granting any tax exemption shall be passed without the concurrence of a majority of all the members of Congress.

Answer 62

c. No person shall be imprisoned for debt or non-payment of tax, poll tax

Question 63

The distinction of a tax from permit or license fee is that a tax is:

a. Imposed for regulation.

b. One which involves an exercise of police power.

c. One in which there is generally no limit on the amount that may be imposed.

d. Limited to the cost of regulation.

Answer 63

c. One in which there is generally no limit on the amount that may be imposed.

Question 64

Police power as distinguished from the power of eminent domain:

a. Just compensation is received by the owner of the property.

b. May be exercised by private individuals.

c. May regulate both liberty and property

d. Property is taken by the government for public purpose.

Answer 64

c. May regulate both liberty and property

Question 65

A tax wherein both the impact of or the liability for the payment of the tax as well as the burden of the tax falls on the same person.

a. Direct tax
b. VAT
c. Indirect tax
d. Percentage tax

Answer 65

a. Direct tax

Question 66

Which one of the following is not a characteristic or element of a tax?

a. It is an enforced contribution.
b. It is legislative in character.
c. It is based on the ability to pay.
d. It is payable in money or in kind.

Answer 66

d. It is payable in money or in kind.

Question 67

Tax as distinguished from license fees:

a. Limited to cover cost of regulation.

b. A regulatory measure.

c. Non-payment does not necessarily render the business illegal.

d. Imposed in the exercise of police power

Answer 67

c. Non-payment does not necessarily render the business illegal

Question 68

The power to impose taxes is exercised by the

a. President
b. Supreme Court
c. BIR
d. Congress

Answer 68

d. Congress

Question 69

One of the characteristics of internal revenue laws is that they are:

a. Criminal in nature
b. Penal in nature
c. Political in nature
d. Generally, prospective in application

Answer 69

d. Generally, prospective in application

Question 70

Which of the following is not an example of excise tax:

a. Transfer tax
b. Sales tax
c. Real property tax
d. Income tax

Answer 70

c. Real property tax

Question 71

The following are similarities of the inherent power of taxation, eminent domain, and police power, except one:

a. Are necessary attributes of sovereignty

b. Superior to the non-impairment clause of the constitution

c. Compensation/benefit is received;

d. Are legislative in character.

Answer 71

b. Superior to the non-impairment clause of the constitution

Question 72

Which of the following statements is not correct?

a. Taxes may be imposed to raise revenues or to provide disincentives to certain activities within the state;

b. The state can have the power of taxation even if the Constitution does not expressly give it the power to tax;

c. For the exercise of the power of taxation, the state can tax anything at any time

d. The provisions of taxation in the Philippine Constitution are grants of power enabling the state to impose taxes.

Answer 72

d. The provisions of taxation in the Philippine Constitution are grants of power enabling the state to impose taxes.

Question 73

License fee as distinguished from tax:

a. Non-payment does not necessary render the business illegal;
b. A revenue raising measure;
c. Imposed in the exercise of taxing power
d. Limited to cover cost of regulation

Answer 73

d. Limited to cover cost of regulation

Question 74

Value-added tax is an example of a:

a. Graduated tax
b. Progressive tax
c. Regressive tax
d. Proportional tax

Answer 74

d. Proportional Tax

Question 75

Which tax principle is described in the statement “The more income earned by the taxpayer, the more tax he has to pay.”

a. Fiscal adequacy
b. Theoretical justice/Equitability
c. Administrative feasibility
d. Inherent in sovereignty

Answer 75

b. Theoretical justice/Equitability

Question 76

One of the characteristics of a tax is that:

a. It is generally based on contract;
b. It is generally payable in money;
c. It is generally assignable;
d. It is generally subject to compensation

Answer 76

b. It is generally payable in money;

Question 77

The following are the characteristics of our internal revenue laws except

a. Political in nature;
b. Civil in nature;
c. Generally prospective in application
d. May operate retrospectively if Congress so provides

Answer 77

a. Political in nature

Question 78

Which of the following statements is wrong? A revenue bill:

a. Must originate from the House of Representatives and on which same bill the Senate may propose amendments;

b. May originate from the Senate and on which same bill the House of Representatives may propose amendments,

c. May have a House version and a Senate version approved separately, and then consolidated, with both houses approving the consolidation version.

d. May be recommended by the President to Congress.

Answer 78

c. May have a House version and a Senate version approved separately, and then consolidated, with both houses approving the consolidation version.

Question 79

Tax as distinguished from special assessment:

a. not a personal liability of the person assessed
b. based wholly on benefits
c. exceptional as to time and place
d. based on necessity and the purpose is to raise revenues

Answer 79

d. based on necessity and the purpose is to raise revenues

Question 80

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 80

c. Fiscal adequacy

Question 81

Which of the following may not raise money for the government?

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

Answer 81

c. Power of eminent domain

Question 82

No person shall be imprisoned for non-payment of this:

a. Excise tax
b. VAT
c. Income tax
d. Poll tax

Answer 82

d. Poll tax

Question 83

This is a demand of ownership:

a. License fee
b. Tax
c. Toll
d. Customs duties

Answer 83

c. Toll

Question 84

Income tax is generally regarded as

a. an excise tax
b. a tax on persons
c. a property tax
d. tax on profits

Answer 84

a. an excise tax

Question 85

Which of the following is not acceptable for legally refusing to pay the 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 as unconstitutional
d. That there is no benefit derived from the tax

Answer 85

d. That there is no benefit derived from the tax

Question 86

A law granting tax exemption requires the concurrence of

a. Majority vote of all members of Congress
b. 2/3 vote of members of Congress
c. ¼ vote of members of Congress
d. unanimous vote of members of Congress

Answer 86

a. Majority vote of all members of Congress

Question 87

No person shall be imprisoned for debt or non-payment of a poll tax. This is a (an)

a. Inherent limitation
b. Constitutional limitation
c. International limitation
d. Territorial limitation

Answer 87

b. Constitutional limitation

Question 88

The Department of Finance thru 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

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 contract

d. Valid, because the purpose is to promote public welfare

Answer 88

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

Question 89

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 89

d. based on law

Question 90

Congress can impose a tax at any amount and at any time shows that

a. Taxation is an inherent power of the estate
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

Answer 90

c. Taxation is a very broad power of the state

Question 91

A charge imposed on land for special benefits derived resulting from public improvements

A. Tax
B. Toll
C. License
D. Special assessment

Answer 91

D. Special assessment

Question 92

The following are constitutional limitations, except

A. No imprisonment for non-payment of poll tax.

B. Non-impairment of the obligation of contracts.

C. Rule of uniformity and equity 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

Answer 92

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

Question 93

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 93

D. Amount of tax to be imposed