96. Mike is the owner of a 5,000 sq. m. parcel of land located in New Manila, Quezon City.

He leased
the property for P500.000 a year to a religious congregation for a period of ten (10) years. The religious
congregation built on a 1,000 sq. m. portion a seminary and a chapel which it used in connection with its
religious activities. It also constructed a ten (10) story building on the remaining 4,000 sq. m. which it
rented out to various commercial establishments, the proceeds of which go to the support of its various
seminaries located throughout the Philippines. These seminaries are organized as non-profit and non-
stock educational institutions.

Which of the following is the correct tax implication of the foregoing data with respect to payment of
income tax?
a. The religious congregation is exempt from payment of income taxes on rental receipts because
the the collections were used to support its various seminaries located throughout the Philippines.
b. The religious congregation is exempt from payment of income taxes on rental receipts provided
not more than 30% of its receipts were used for administrative purposes.
c. The religious congregation is subject to income taxation. The constitutional tax exemptions refer
only to real property that are actually, directly and exclusively used for religious, charitable or
educational purposes, and that the only constitutionally recognized exemption from taxation of
revenues are those earned by non-profit, nonstock educational institutions which are actually,
directly and exclusively used for educational purposes.
d. None of the above

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 ❖ Answer: C
LJ The 5,000 sq m. leased by the religious constitution will be taxed as follows:
x
The 1,000 sq. m is exempt from RPT because it is actually, directly and
exclusively used for religious purposes.
> However, the remaining 4,000 sq. m. leased for commercial purposes is
subject to RPT.

97. The basis or test of exemption of real properties owned by religious, or charitable entities
from real property taxes is:
a. Use of the real property
b. Ownership of the real property
c. Location of the real property
d. Ownership or location real property at the option of the government

❖ Answer: A

98. ‘Government agencies performing governmental functions are exempt from tax unless
expressly taxed while those performing proprietary functions are subject to tax unless
expressly exempted” refers to:
a. The tax imposed should be for public purpose.
b. There should be no improper delegation of the taxing power.
c. The power to tax is limited to the territorial jurisdiction of the taxing government.
d. Exemption of government entities from taxation.

❖ Answer: D

99. A taxpayer gives the following reasons for refusing to pay a tax. Which of his reasons
is not acceptable for legally refusing to pay the tax?
a. That he has been deprived of due process of law.
b. That there is lack of territorial jurisdiction.
c. That the prescriptive period for the tax has lapsed.
d. That he will derive no benefit from the tax.

❖ Answer: D

Situs Taxation
100. It literally means “place of taxation”
the country that has the power and jurisdiction to levy
and collect .the tax
a. Basis of taxation c. Scope of taxation
 b. Situs of taxation d. Theory of taxation

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❖ Answer: B 1

101. Which among the following concepts of taxation is the basis for the situs of income
taxation?
a. Lifeblood doctrine of taxation

Princess
b. Symbiotic relation in taxation
c. Compensatory purpose of taxation
d. Sumptuary purpose of taxation

❖ Answer: B