Inherent and Constitutional Limitations

73. Statement 1: Inherent limitations are the natural restrictions to safeguard and ensure that the power
of taxation shall be exercised by the government only for the betterment of the people whose
interest should be served, enhanced and protected.

Statement 2: Constitutional limitations are provisions of the fundamental law of the land that
restrict the supreme, plenary, unlimited and comprehensive exercised by the State of its inherent
power to tax.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

❖ Answer: C

74. Which of the following is incorrect description of taxation?

a. Legislative and inherent for the existence of the government.
b. Necessary and for public purpose
c. Supreme and absolute power of the State
d. The strongest of all inherent powers of the State.

❖ Answer: C
o The power to tax is not an absolute power. It is subject to inherent as well as ■
constitutional limitations

PrhtcL.
75. Which limitation on the power of taxation inherently implied that the State's primary
concern is for the common good of the people?
a. Equality in taxation c. Due process of law
b. Equal protection of law d. For public purposes

❖ Answer: D

76. These are restrictions imposed by the Constitution.

a. Inherent limitations
b. Constitutional limitations
c. Basic principles of sound tax system
d. None of the choices
 ❖ Answer: B

77. Which of the following is a constitutional limitation on the power of taxation?

I. Territoriality of taxes
Public purpose