1. Which of the following statements is not correct?

a. Taxes may be imposed to raise revenues or to provide disincentives to certain

activities within the state;
b. The state can have the power of taxation even if the Constitution does not
expressly give it the power to tax;
c. For the exercise of the power of taxation, the state can tax anything at any
time;
d. The provisions of taxation in the Philippine Constitution are grants of power
and not limitations on taxing powers.

2. One of the characteristics of internal revenue laws is that they are:

a. Criminal in nature;
b. Penal in nature;
c. Political in nature;
d. Generally prospective in application.

3. One of the characteristics of our internal revenue laws is that they are:
a. Political in nature;
b. Penal in nature;
c. Generally prospective in operation although the tax statue may nevertheless
operate retrospectively provided its clearly the legislative intent;
d. Answer not given.
4. In case of conflict between tax laws and generally accepted accounting principles (GAAP):
a. Both tax laws and GAAP shall be enforced;
b. GAAP shall prevail over tax laws;
c. Tax laws shall prevail over GAAP;
d. The issues shall be resolved by the courts

5. The following are similarities of the inherent power of taxation, eminent domain, and police power,
except one:
a. Are necessary attributes of sovereignty;
b. Interfere with private rights and property;
c. Affect all persons or the public;
d. Are legislative in implementation.
6. Tax as distinguished from license fee:
a. Non- payment does not necessarily render the business illegal;
b. A regulatory measure;
c. Imposed in the exercise of police power;
d. Limited to cover cost of regulation.

7. Which statement refers to police power as distinguished from taxation?

a. It can only be imposed on specific property or properties;
b. The amount imposed depends on whether the activity is useful or not;
c. It involves the taking of property by the government;
d. The amount imposed has no limit.

8. The distinction of a tax from permit or license fee is that a tax is:
a. Imposed for regulation;
b. One which involves an exercise of police power;
c. One in which there is generally no limit on the amount that may be imposed;
d. Answer not given.
9. Which of the following is not an example of excise tax:
a. Transfer tax; c. Real property tax;
b. Sales Tax; d. Income tax.

10. Value-added tax is an example of:

a. Graduated tax; c. Regressive tax;
b. Progressive tax; d. Proportional tax.

11. The power of taxation is inherent in sovereignty being essential to the existence of every government.
Hence, even if not mentioned in the Constitution the state can still exercise the power.
It is essentially a legislative function. Even in the absence of any constitutional provision, taxation power fails
to Congress as part of the general power of law making.
a. False, false; c. True, True;
b. False, True d. True, False.
12. Which of the following is not a scheme of shifting the incidence of taxation?
a. The manufacture transfers the tax to the consumer by adding the tax to the selling price of the goods sold;
b. The purchaser asks for a discount or refuse to buy at regular prices unless it is reduced by the amount equal
to the tax he will pay;
c. Changing the terms of the sale like FOB shipping point in the Philippines to FOB destination abroad, so that
the title passes abroad instead of in the Philippines;
d. The manufacturer transfers the sales tax to the distributor, then in turn to the wholesaler, in turn to the
retailer and finally to the consumer.

13. The proportional contribution by persons and property levied by the law-making body of the State by virtue of
its sovereignty for the support of the government and all public needs is referred as:
a. Taxes; c. License fee;
b. Special assessments; d. Answer not given.

14.One of the characteristics of tax is that:

a. It is generally based on contract;
b. It is generally payable in money;
c. It is generally assignable;
d. Answer not given.
15. Tax of a fixed proportion of the value of the property with respect to which the tax is assessed and
requires the intervention of assessors or appraisers to estimate the value of such property before the
amount due from each taxpayer can be determined is known as:
a. Specific;
b. Ad valorem;
c. Special or regulatory;
d. Answer not given.

16.Which of the following statements is not correct?

a. An inherent limitation of taxation may be disregarded by the application of a constitutional
limitation;
b. The property of an educational institution operated by a religious order is exempt from property tax,
but its income is subject to income tax;
c. The prohibition of delegation by the state of the power of taxation will still allow the Bureau of
Internal Revenue to modify the rules on time for filing of returns and payment of taxes;
d. The power of taxation is shared by the legislative and executive departments of government.

17.Which statement is correct? A revenue regulation, as a source of tax law, is:

a. Promulgated by the bureau of Internal Revenue;
b. Promulgated by the Department of Finance;
c. Promulgated by the Department of Finance upon the recommendation of the Bureau of Internal
Revenue;
d. An interpretation of the revenue law by the Bureau of the Internal Revenue.
18. Congress enacted a law increasing the personal exemptions of individuals under the income tax law
to a uniform P50, 000 for all individuals, regardless of status of the individuals. The law took effect
sometime within the year. The Secretary of Finance will allow the increase on personal exemption to a
date:
a. On the effectivity of the law within the year;
b. As of the beginning of the year in which the law was passed by Congress;
c. As at the beginning of the succeeding year;
d. Only when Congress passes a law clearly stating the effectivity of the increase.

19. Which of the following has no power of taxation?

a. Provinces;
b. Cities;
c. Barangays;
d. Barrios.

20.A tax must be imposed for a public purpose. Which of the following not a public purpose?
a. National defense;
b. Public Education;
c. Improvement of the sugar industry;
d. None of the above.
21. The basic community tax of P5. 00 of an individual is as to who bears the burden:
a. A personal tax; c. A national tax;
b. A direct tax; d. An ad valorem tax.

22. A person was given by a special law the privilege to operate a public utility (franchise), in consideration
of which, he was required by that law to pay a franchise tax. This franchise can be amended by:
a. An amendment of that special law only;
b. An amendment of that special law or a law of general application;
C .An amendment of a revenue regulation;
d. None of the above.

23.A tax on business is:

a. Direct tax; c. Property tax;
b. Indirect tax d. none of the above.

24.Which is the correct and best statement? A tax reform at any given time underscores the fact that:
a. Taxation is an inherent power of the state;
b. Taxation is essentially a legislative power;
c. Taxation is a power that is very broad;
d. The state can and should adopt progressive taxation.
25.Which statement gives the correct answer? That a feasibility study needs or need not look into the
taxes of different political subdivisions of government which may be alternative sites of the business is
because:
a. Provinces, cities and municipalities must have uniform taxes between and among themselves;
b. The local taxes of one political subdivision need not be uniform with the local taxes of another
political subdivision;
c. Businesses that are subject to national business taxes are exempt from local business taxes;
d. Local business taxes may be credited against national business taxes.

26.Which statement is wrong?

a. A tax is a demand of sovereignty;
b. A toil is a demand of ownership;
c. A special assessment is a tax;
d. Customs duty is a tax;

27.A fundamental rule in taxation is that the property of one country may not be taxed by another
country. This is known as:
a. International law;
b. International comity;
c. Reciprocity;
d. Internal inhibition.
28.In this power of the state, the person who is parting with his money/property is presumed to receive
a benefit:
a. Taxation;
b . Police power;
c. Eminent domain;
d. None of the above.

29.In all, except one, there can be a classification of the subject matter being required to shoulder the
burden. Which is the exception?
a. Tax; c. Toll;
b. License fee; d. Eminent domain;

30.There can be no tax unless there is a law imposing the tax is consistent with the doctrine or principle
of:
a. Uniformity of taxation;
b. Due process of law;
c. Non-delegation of the power to tax;
d. The power of taxation is very broad and the only limitation is the sense of responsibility of the
members of the legislature to their constituents.
31. Which of the following is not an element of direct double taxation?
a. Two taxes;
b. Same subject matter;
c. Same year;
d. Same amount.

32.Statement 1: The value-added tax is a property tax;

Statement 2: The estate tax is a direct tax.

a.The two statements are correct;

b.The two statement are wrong;
c.The first statement is correct while the second statement is wrong;
d.The first statement is wrong while the second statement is correct.

33.Statement 1: Because the power of taxation is inherent in state, the inherent limitation on the power of
taxation always applies.
Statement 2: Inherent limitations on the power of taxation must give way to constitutional limitations.

a.The first statement is true while the second statement is false;

b.The first statement is false while the second statement is true;
c.Both statements are true;
d.Both statements are false;
34. Which statement is wrong? “The tax should be based on the taxpayer’s ability to pay”.
a. As a basic principle of taxation, this is called “theoretical justice;”
b. As a theory of taxation, this is called “ability-to pay-theory”
c. No person shall be imprisoned for non-payment of a tax;
d. A graduated tax table is in consonance with this rule.

35. Statement 1: The power of Tax can be delegated to units of local government, but with limitations as
may be imposed by law.
Statement 2: The power to tax cannot be delegated to the executive department of the National
Government.
a. The first statement is true while the second statement is false;
b. The first statement is false while the second statement is true;
c. Both statements are true;
d. Both statements are false;

36. Which statement is false?

a. A tax is a demand of sovereignty while toil is a demand of property ownership.
b. Non-payment of a tax does not make the activity taxed unlawful;
c. A grant of police power to a unit of local government carries with it a grant of the power to tax.
d. Customs duty is a tax.
37. Some franchise holders who are paying the franchise tax are being required by an amendatory law
to pay the value-added tax, while others remain subject to the franchise tax. Which of the following
constitutional provisions make the law unconstitutional?
a. No law shall be passed impairing the obligation of contracts;
b. The rule on taxation shall be uniform;
c. No person shall be deprived of property without due process of law;
d. None of the above.

38. Under this basic principle of a sound tax system, the Government should not incur a deficit:
a. Theoretical justice;
b. Administrative feasibility;
c. Fiscal adequacy;
d. None of the above.

39. That the legislative body can impose a tax at any amount underscores the legal legal truism that:
a. Taxation is an inherent power of the state;
b. Taxation is a very broad power of the state;
c. Taxation is essentially a legislative power;
d. None of the above.
40. The city of Manila, claiming that it can impose taxes under the Local Government Code, imposed a
tax on banks (in addition to the percentage tax on banks imposed in the National Internal Revenue
Code). The banks within the City of Manila objected for the various reasons given below.

Which would justify the objection of the banks?

a. The power of taxation cannot be delegated;
b. The rule on double taxation;
c. Uniformity in taxation;
d. None of the above.

41. The amount required is dictated by the needs of the government in:
a. License fee;
b. Tax
c. Toll;
d. None of the above.

42. This is a demand of owners:

a. License fee;
b. Tax;
c. Toll;
d. None of the above.
43. No person shall be imprisoned for non-payment of this:
a. Property tax;
b. Excise tax;
c. Poll tax;
d. None of the above.

44. As a basic principle of taxation, that “Taxes must be bases on the taxpayer’s ability to pay” is
called:
a. Equality in taxation;
b. Ability-to-pay” theory;
c. Theoretical justice;
d. Equity in taxation.

45. Which of the following may not raise money for the government?
a. Power of taxation;
b. Police power;
c. Eminent domain;
d. None of the above.
46. Which is not an essential characteristic of tax?
a. It is unlimited as to amount;
b. It is payable in money;
c. It is proportionate in character;
d. It is regular payment.

47. Statement 1: Tax evasion, which is the use of means to escape a tax that is already a liability, is
prohibited by law, and is punishable;
Statement 2: Tax avoidance, which is the use of means to prevent an accrual of a tax, or to minimize a tax
that may accrue, is likewise prohibited by law and is punishable.
a. The first statement is true while the second statement is false;
b. The first statement is false while the second statement is true;
c. Both statements are true;
d. Both statements are false.

48. Under CREATE, the new corporate income tax for Domestic corporations is
a. 20% b.25% c.30% d.35%

49. MCIT under CREATE law is

a. Still 2% b. 1% c. 2% until June 30,2023 d.1% until June 30,2023

50. IAET under CREATE

a. Same b. Reduced to 50% c. Repealed d. Suspended