Exercise 1.1TRUE OR FALSE Determine whether the following statements are true or false.
FALSE 1. The Marshall Doctrine states that the power to tax is not the power to destroy while the court
sits.
TRUE 2. The administrative act of taxation is primarily the duty of the Bureau of Internal Revenue.
TRUE 3. The police power of the State may be exercised through taxation because taxes may be levied
for the promotion of the welfare of the public
TRUE 4. A person cannot be imprisoned for non-payment of tax.
TRUE 5. Though the Senate is part of the Philippine Congress, tax bills cannot originate from it.
TRUE 6. The primary purpose of taxation is to raise revenues of the government to defray its expenses
on its performance of public goods.
TRUE 7. The basis of taxation is the government’s necessity for funding.
FALSE 8. Tax laws are generally retrospective in application, meaning, application of which starts when
the statute is enacted.
TRUE 9. The exemption of the government from taxation extends to government-owned and -controlled
corporations.
TRUE 10. The Congress is the one primarily responsible for the collection of taxes.
Exercise 1.2IDENTIFICATION Identify the terminologies best described by the following statements.
TAXES 1. The enforced proportional contributions from persons and property levied by the lawmaking
body of the State
EMINENT DOMAIN 2. The power of the State to take private property for public use after paying just
compensation
TAX EVASION 3. This refers to any act or trick that tends to illegally reduce or avoid the payment of tax
TRASFORMATION 4. This pertains to the elimination of wastes and losses by the taxpayer to form
savings to compensate for the tax imposition or increase in taxes
SITUS OF TAXATION 5. The place of taxation
Exercise 1.3MULTIPLE CHOICE Choose the best answer from the choices provided.
C 1. A tax must be imposed for public purposes. Which of the following is not a public purpose?
a. Procurement of army weapons
b. Construction of rehabilitation centers for drug addicts
c. Construction of a satellite for a telco company
d. Expenses on the President’s state visits to other countries
D 2. Persons or things belonging to the same class shall be taxed at the same rate
a. Simplicity in taxation
b. Equality in taxation
c. Reciprocity in taxation
d. Uniformity in taxation
C 3. For double taxation to be considered direct, it should meet the following criteria, except
a. Taxing the same object twice
b. Same period
c. Same amount of tax
d. Same jurisdiction
D 4. 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 tine laws
c. Non-impairment of the jurisdiction of the Supreme Court in tax cases
d. Exemption of the government
C 5. 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 Exercise
1.4SITUS RULES APPLICATION
Dina B. Nalican, Spanish by citizenship, obtained the income from the following during the year.
·Having posted in Shoppy, a customer browsing the online shopping application in General Santos City
asked if she could inspect the car personally. It was after the inspection in Zamboanga City that the
customer agreed to buy the car. It is to be delivered to and paid by the customer in Davao City.
·Dina has a hardware store located in Mactan, Cebu. She decided to close the main branch in Leyte five
years ago.
·She also lends thru the 5-6 system of lending in her residence in Quiapo. A debtor residing in Quezon
City owes her P60,000, inclusive of interests. They are to meet in Sampaloc for the payment of said debt.
·Dina owns a condo unit in Laoag City. A student from Cagayan rents said property and pays to Dina’s
son (residing in Vigan City) the rent when they meet up in Batac City. Determine the situs of
INCOME TAX AND SERVICES 1. Tax on the gain on sale of her car
PROPERTY TAX 2. Tax on her hardware store
INCOME TAX AND INTEREST 3. Tax on interest income earned
PROPERTY TAX 4. Tax on rental income earned
PERSONAL TAX 5. Personal Tax Exercise
1.5LIMITATIONS
Identify the source of the limitation on the power of taxation. Write C if it is constitutional, I if it is
inherent, B if it is both constitutional and inherent and N if it is not a limitation.
N 1. Imprisonment for non-payment of income tax
C 2. Non-delegation of the taxing power
C 3. Exemption from taxes of the revenues and assets of religious, charitable, or educational entities,
nonprofit cemeteries, churches, and mosques
C 4. No arbitrariness in assessment and collection of taxes
I 5. Taxes collected must be used for public purposes
I 6. Taxes can only be imposed within the territory of the State
B 7. Taxes cannot be assigned
B 8. Tax treaties entered with other contracting States must be honored
