CHAPTER 1- Introduction to Consumption Taxes

MULTIPLE CHOICE- Theory Part 1

1. Which type of consumption will pay consumption tax?

a. Domestic consumption

b. Foreign consumption

c. Both domestic and foreign consumption

d. Neither domestic nor foreign consumption

2. Which is a tax upon the usage of income?

a. Savings tax

b. Investment tax

c. Consumption tax

d. Business tax

3. Which is subject to the VAT on importation?

a. Foreign consumption from resident sellers.

b. Foreign consumption from foreign sellers.

c. Domestic consumption from resident sellers.

d. Domestic consumption from foreign sellers.

4. Which is subject to business tax?

a. Foreign consumption from resident sellers.

b. Foreign consumption from foreign sellers.

c. Domestic consumption from resident sellers.

d. Domestic consumption from foreign sellers.

5. Which is an incorrect statement regarding consumption taxes?

a. They are always indirect in nature.

b. They effectively tax everyone in the state.

c. Apply only when the goods or services are destined for consumption within the Philippines.3