A.

Modified TRUE or FALSE

The following statements can be correctly or erroneously stated, write TRUE if

you agree with it otherwise FALSE. 5 points for each correct answer. Additional
10 points will be given for a substantial justification for your agreement or non-
agreement. No additional point in justifying wrong answer.

1. Equal protection clause is a direct limitation on the power of taxation. (15 pts.)
Ans. False. One of the constitutional limitations serves as a guide for the
government to exercise power of taxation.
2. Non-payment of tax makes the business illegal. (15 pts.)
Ans. False. Non-payment of tax has no direct impact to the legalities of a
business operation but may subject to penalties. However, non-payment of
license fee makes the business illegal.
3. Even there is no provision in the constitution the state can exercise its
inherent powers simultaneously. (15 pts.)
Ans. False. Taxation and power of eminent domain may not be exercise
simultaneously. Taxation and police power maybe exercise simultaneously.
4. Taxation is an inherent power because it is the lifeblood of the Government.
(15 pts.)
Ans. False. Taxation becomes an inherent power because it co-exists with
the existence of the state.
5. Taxation, police power and power of eminent domain are necessary attributes
of the constitution. (15 pts.)
Ans. True. Limitations to exercise inherent powers of the state are embodied
in the constitutions. There can be an inherent powers without constitution but,
constitution was designed to regulate the exercise of the inherent powers.

B. Essay

“The government may not do all except one:

 1. Impose tax arbitrarily – does not support sound tax system.
2. Disregard uniformity of Taxation – Constitutional limitation.
3. Tax the activity of Bureau of Customs – “generally” government agencies,
entities and instrumentalities are exempted in paying taxes so that government
functions will not be impeded. But, it can. (c/o Characteristics of the power of
taxation).
4. Delegates its power to tax to private agencies.” – Only Government can exercise
this inherent power of the state.

Which do you think is the exception?

Discuss your analysis of the above illustration, for a full score credit discussion must be
appropriate and includes all four activities given. (25 points)