TAXATION

I. Objective

1. It is an enforced proportionate contribution imposed upon persons, properties,

businesses, rights, interests, privileges, transactions and acts within the territorial
jurisdiction of the taxing authority exercise by the legislature for a public purpose and
generally payable in money.
a. Taxation
b. Lifeblood doctrine
c. Tax
d. Direct tax
2. It is imposed on the person obliged to pay the same and this burden cannot be shifted or
passed on to another.
a. Indirect tax
b. Direct tax
c. V.A.T.
d. Excise tax
3. This imposition is based on the value of the property subject to tax.
a. Specific tax
b. Excise tax
c. V.A.T.
d. Ad valorem tax
4. What is revenue?
a. Refers to the duties payable on goods imported or exported.
b. Refers to the amount imposed.
c. It is one of the sources of government's revenues.
d. Refers to all the funds or income derived by the government from whatever
sources
5. It is a kind of property tax confined to local imposition upon improvements in its
immediate vicinity and levied with reference to special benefits to the property assessed.
a. Assessment
b. Tax
c. Special assessment
d. Ad valoremtax
6. The power of the government to select the subjects of taxation and the apportionment of
tax burden among them includes the power to make classifications. If the consequence
thereof is the singling out of one particular class for taxation or exemption, that infringes
no violation of the limitations or restrictions in the exercise of the taxing authority.
a. Classification statute
b. Special assessment
c. Tax assessment
d. Equal protection clause
7. It is where the refund of taxes are barred by prescription which can no longer be claimed
by a taxpayer but there is a present tax being assessed against the said taxpayer, such
present tax may be recoup or set off against the tax, the refund of which has been
barred.
a. Doctrine of estoppel
b. Holmes doctrine
c. Doctrine of equitable recoupment
d. Marshall dictum
8. Taxing the object or subject within the territorial jurisdiction twice, by the same taxing
authority for the same period with the same purpose and involving the same or similar
kind of tax
a. Double taxation
b. Direct dublicate taxation
c. Indirect dublicate taxation
d. Taxation
9. What is tax avoidance?
a. Also referred to as tax minimization scheme.
b. There is fraudulent intent to avoid payment of taxes.
c. The reduction of taxes through legally permissible means that are not prohibited
and therefore are not subject to penalties.
d. a and c
10. What are the grounds for tax exemption?
a. Based on contract
b. Based on grounds of public policy
c. Based on some grounds to foster charitable and other benevolent institutions
d. All of the above
11. To remit or to desist or refrain from exacting or imposing a tax. It cannot extend to refund
of taxes already paid when obtaining.
a. Tax exemption
b. Tax evasion
c. Tax condonation
d. All of the above
12. It is a class suit brought by one or more taxpayers on behalf of themselves and as
representation of a class of taxpayers situated within a taxing district and for the purpose
of seeking relief from illegal or unauthorized acts of the government or its tax officials
which acts are injurious to their common interest as taxpayer.
a. Taxpayer
b. Tax suit
c. Taxpayer's suit
d. Tax amnesty
13. What are the requisites of exemption from capital gains tax in case an individual sells his
principal dwelling?
a. Selling of a principal dwelling by an individual taxpayer, the proceeds from the
sale will be utilized in the acquisition of another residential dwelling.
 b. The intention must be reported to the BIR within 30 days from sale.
c. Seller must show proof that the second real property was purchased within 18
months from sale of the first asset and that privilege is exercised only once within
a period of 10 years.
d. All of the above
14. The following fringe benefits are not taxable, except?
a. SSS
b. Overtime meal allowance
c. Cost of premiums borne by employer
d. Vehicle of any kind
15. It is an uniform percentage tax imposed on each sale of goods or services in the course
of trade or business as they pass along the production and distribution chain,
culminating with the sale to the final end-consumer.
a. Fringe benefits
b. Value added tax
c. VAT
d. De minimis benefits
16. It is the tax on the purchase price of goods that is passed on or shifted to a
buyer/purchaser by the supplier/seller.
a. Input tax
b. Tax
c. VAT
d. Sales
17. When is an assessment deemed made by the CIR?
a. Prescriptive period of 3 or 10 years
b. Notice to that effect
c. Both a and b
d. A only
18. This is a vital document that is a formal declaration or resistance of the taxpayer.
a. Tax protest
b. Tax remedy
c. Letter of authority
d. None
19. It is the seizure by the government of personal property, tangible or intangible belonging
to the taxpayer, to enforce payment of taxes.
a. Tax lien
b. Distraint
c. Levy
d. Garnishment
20. It is a direct tax on the ownership of lands and buildings or other improvements thereon
not specially exempted and is payable regardless of whether the property is used or not,
although the value may vary in accordance with such factors.
a. Real property tax
b. Ad valorem
 c. Donor tax
d. Estate tax
21. How are real properties appraised?
a. Market value
b. Fair market value
c. Assessed value
d. Zonal value
22. It includes customs duties, tolls or tribute payable upon merchandise to the general
government; rate of customs or list of articles liable to duties.
a. Custom duties
b. Tariff
c. Fees
d. Custom valuation
23. It is the name given to taxes on importation and exportation of commodities, the tariff or
tax assessed upon merchandise imported from, or exported to, a foreign country.
a. Tariff
b. Fees
c. Custom duties
d. Custom valuation
24. It is the imposition of high customs duties which results to making the foreign goods
more expensive compared with locally produced articles.
a. Regular tariffs
b. Special tariffs
c. Custom duties
d. Preferential tariffs
25. What are the kinds of regular customs duties?
a. Specific duty
b. Compound duty
c. A and b
d. A and b and alternating duty
26. Imposed on imported goods where it appears that a specific kind or class of foreign
article is being imported into or sold or is likely to be sold in the philippines at the price
less than its fair value.
a. Countervailing duty
b. Safeguard
c. Anti-dumping duty
d. Marking duty
27. What is the period for filing import entry?
a. 20 days from the discharge
b. 30 days from the discharge
c. 15 days
d. All of the above
28. It is a system which allows the deduction from gross income of arbitrary amounts for
personal, living or family expenses of the taxpayer.
 a. Wisconsin Plan
b. Fiscal adequacy
c. Both a and b
d. None
29. It is a tax imposed on the legal right or privilege to succeed to, receive or take property
by or under will, intestacy law or deed, grant or gift becoming operative at or after death.
a. Estate tax
b. Inheritance tax
c. Donor's tax
d. Transfer tax
30. It means that all persons subjected to such legislation shall be treated alike, under like
circumstance and conditions, both in the privileges conferred and in the liabilities
imposed.
a. Equal protection of law
b. Equality
c. Uniformity
d. Due process

II.

A. HO has its principal business in Quezon City, it has several branches operating in the
provinces. Is the sale of HO in its branch office taxable?

B. X and Y are fixed income earners who executed a deed of exchange of two parcels of
land, located in the same municipality with no considerations. Is the exchange taxable?

C. HW constructed a new residential house in the city. Upon completion they sold their old
house. May HW avail of tax exemption of the capital gains tax?

D. Is the sale of land that is devoted strictly for religious purposes by the church exempted
from capital gains tax?

Answer keys:

I.
1. C
2. B
3. D
4. D
5. C
6. A
7. C
 8. A
9. D
10. D
11. C
12. C
13. D
14. D
15. B
16. A
17. C
18. A
19. B
20. A
21. B
22. B
23. C
24. D
25. D
26. C
27. B
28. A
29. B
30. A

II.

A. No. The transaction pertains to one and the same entity. The taxable item or gross
income from transactions between HO and its branch office does not involve another
natural or juridical entity. HO shall pay all internal revenue taxes of its branches at the
place where its principal office is located.
B. Yes. Capital gains tax is applicable not only to sale but also to barter and exchange,
both parties will pay the tax separately as if each one sold their property to the other.
The parcels of land are capital assets since the land is not held primarily for sale or
lease in the ordinary course of business.
C. No. The exemption from capital gains tax is in sale of HW's principal residence is not
covered by the exemption because the law provides that exemption may be availed of
when the first principal residence is sold and the proceeds therefrom is used to acquire a
second principal residence. Hence, the old residence should first be sold before
acquiring or constructing the new residence. HW is not qualified under the exemption.
D. No. The transaction is not exempt from the capital gain tax. It is due from the seller of
the land. While it is true that the religious organization enjoys tax exemption privileges as
provided under the constitution, said exemption is only on the annual real property tax
and not to any other tax, like capital gains tax.