NAME: ____________________________________

PRE-MIDTERM EXAMINATION - TAXATION

PRELIMINARY EXAMINATION
AE 26

Name: Carla Jane M. Apolinario Score: ________________

Instructor: Mr. Joey Beringuela, CPA Schedule: M:W/ 7:00PM-8:30PM

PLEASE FILL OUT THE NECESSARY INFORMATION ABOVE AND ON THE SUCCEEDING PAGES. ERASURE AND CHANGING
OF ANSWERS ARE STRICLY PROHIBITED. CAREFULLY FOLLOW INSRUCTIONS. WORK EFFECTIVELY AND EFFICIENTLY.

TRUE OR FALSE – On the space provided before each number, write Bongga if the statement is true and write Kaday if
the statement is false.

Kaday 1.Special assessment is levied only on land and is a personal liability of the person assessed.
Kaday 2.Toll is a demand of proprietorship is paid for the use of another’s property and may be imposed only by the
government.
Kaday 3. The Bureau of Internal Revenue functions under the supervision and control of the Bureau of Treasury.
Kaday 4.There are two kinds of double taxation – evasion and avoidance.
Bongga 5.Penalty is designed to regulate conduct and may be imposed by the government, private individuals or entities.
Kaday 6. The levying of tax is essentially an administrative function.
Kaday 7. Excise taxes on specific goods imposed under the National Internal Revenue Code are always specific.
Kaday 8.Tax evasion is known as tax minimization while tax avoidance is known as tax dodging.
Kaday 9.Indirect double taxation is unconstitutional.
Bongga 10. One of the essential characteristics of a tax is that it is enforced contribution.
Kaday 11. Income tax is an ad valorem tax.
Bongga 12.Income tax is an excise tax.
Bongga 13. The power of taxation is inherent in sovereignty.
Bongga 14.Taxes on distilled spirits, fermented liquors and the like are specific taxes.
Kaday 15.In the case of intangible personal property, as a rule, situs is the domicile of the owner even if he has acquired
in another place.

MULTIPLE CHOICE - Write on the space provided the letter of your answer.

B. 1. It is a 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.
a. Specific c. special or regulatory
b. Ad valorem d. none of the above

C. 2.Among the nature of taxation are the following. Which one is not?
a. It is inherent in sovereignty
b. The citizenry benefits from it
c. The government solely benefit from it
d. It is a means by which the government raises income

B. 3.In case of conflict between tax laws and generally accepted accounting principles (GAAP)
a. GAAP shall prevail over tax laws
b. Tax laws shall prevail over GAAP
c. The issue shall be resolved by the courts
d. Both tax laws and GAAP shall be enforced

B. 4. The following are sources of tax laws. Which is not a source?

a. Barangay resolutions
b. Supreme court decisions
c. Treaties or international agreements
d. Revenue Regulations by the Department of Finance

A. 5.Which statement is false? Income tax

a. Is always a direct tax
b. Is always based on gross amount
c. Is a tax on person’s income, emoluments or profits
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PRE-MIDTERM EXAMINATION - TAXATION

d. Is a tax on all yearly profits arising from property, profession, trade or business

A. 6. It is the proportional contribution by persons and property levied by the lawmaking body of the State by virtue
of its sovereignty for the support of the government and all public needs.
a. Taxes c. Special assessment
b. License fees d. none of the above

D. 7.Percentage tax is an example of

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

B. 8.As to object, taxes may be classified according to the following except one. Which is the exception?
a. Excise c. Property
b. Specific d. Personal, poll or capitation

B. 9. The following are national internal revenue taxes. Which one is not?
a. Excise taxc. Value-added tax
b. Import dutyd. Documentary stamp tax

A. 10.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. None of the above

C. 11.Which is not example of excise tax?

a. Value-added taxc. Real property tax
b. Transfer taxd. Income tax

B. 12.All of the following are similarities of the inherent power of taxation, eminent domain, and police power. Which
is not?
a. Affect all person or the public
b. Are legislative in implementation
c. Are necessary attributes of sovereignty
d. Interfere with private rights and property

C . 13.Situs of taxation is the place of taxation. Which of the statements is not true about situs?
a. Subject matter is a must to determine situs
b. Situs of persons is the residence of the taxpayer
c. Citizenship, in determining the situs, is not a factor to consider
d. None of the above

D. 14.The following statements are correct except one. Which one?

a. For the exercise of the power of taxation, the State can tax anything at any time
b. The provisions of taxation in the Philippine Constitution are grants of power and not limitations on taxing
powers
c. Taxes may be imposed to raise revenues or to provide disincentives to certain activities within the state
d. The state can have the power of taxation even if the Constitution does not expressly give it the power to
tax

B. 15.One of the following is not among the basic principles of a sound tax system. Which one is it?
a. Fiscal adequacy c. Theoretical justice
b. Collection of tax d. Administrative feasibility

C. 16.One characteristics of a tax is that

a. It is generally assignable c. It is generally payable in money
b. It is generally based on contract d. None of the above

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PRE-MIDTERM EXAMINATION - TAXATION

D. 17. Taxation is a means by which the national government attempts to

a. Shift wealth from the rich to the power c. Maintain price stability
b. Encourage full employment d. All of the above

A. 18. Which statement refers to police power as distinguished from taxation?

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

C. 19. Tax as distinguished from license fee

a. A regulatory measure
b. Limited to cover cost of regulation
c. Imposed in the exercise of police power
d. Non-payment does not necessarily render the business illegal

B. 20. All of the following except one are inherent limitations of taxation. Which one is not?
a. Taxes may be levied only for public purpose.
b. Governmental agencies are exempt from taxation
c. The State may tax persons and properties under its jurisdiction
d. The property of another State may not be taxed by other States

C. 21. Provincial, city, municipal and barangay ordinances may impose taxes subject to limitations by the local
government code. The following, except one, are existing taxes thereunder. Which is it?
a. Professional tax c. Travel tax
b. Community tax d. Real property tax

B. 22.Which theory in taxation states that without taxes, a government would be paralyzed for lack of power to
activate and operate it, resulting in its destruction?
a. Power to destroy theory c. Sumptuary theory
b. Lifeblood theory d. Symbiotic doctrine

D. 23. Although the power of taxation is basically legislative in character, it is not the function of Congress to
a. Fix with certainty the amount of taxes c. Identify who should collect the tax
b. Collect the tax levied under the law d. Determine who should be subject to tax

B. 24. The National Internal Revenue Code, is also known as:

a. Republic Act 9337 c. Presidential Decree 1158
b. Republic Act 8424 d. Executive Order 464

C. 25. A form of tax escape through which one is given tax immunity wherein others are subjected to tax:
a. Shifting c. Tax exemption
b. Tax immunity d. Tax avoidance

A. 26. Which of the following may not be deducted by an individual taxpayer from his gross compensation income?
a. Premium payment on health insurance c. Additional exemption
b. Basic personal exemption d. Itemized deduction

A. 27. Those required to file a declaration of their estimated income for the current taxable year must file the same on
or before
a. April 15 of the current taxable year c. August 15 of the current taxable year
b. April 15 of the following taxable year d. November 15 of the current taxable year

A. 28. An exemption allowed to a taxpayer who has qualified legitimate, illegitimate, and/or recognized or legally
adopted children is
a. Special additional and personal exemption c. Additional exemption
b. Basic personal exemption d. Optional standard deduction

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NAME: ____________________________________
PRE-MIDTERM EXAMINATION - TAXATION

IDENTIFICATION - On the space provided, write the word or group of words that is being referred to by each
statement.ABBREVIATIONS are not allowed. ( For BSBA STUDENTS ANSWER FIVE (5) ITEMS ONLY)

Tax Avoidance. 1.A form of tax escape by a manufacturer or producer who improves his proceeds of
production thereby minimizing his unit production cost

Eminent Domain. 2.It refers to the power of the state to take private property for public use upon
payment of just compensation.

Tax Evasion. 3.It occurs when the taxpayer resorts to unlawful means to lessen or to get away with
his tax liability.

Debt. 4.It is generally based on contract, is assignable and may be paid in kind.

Penalty. 5.It refers to any sanction imposed as a punishment for violation of law or acts deemed
injurious.

Internal Revenue Law_6.It refers to an individual whose residence is within the Philippines and who is not a
citizen thereof.

Revenue Memoradum Circulars. 7.These refer to the issuances that publish pertinent and applicable portion, as well
as amplifications, of laws, rules, regulations and precedents issued by the BIR and
other agencies/offices.

Special Law. 8.This is also known as Motor Vehicle law.

Republic Act 9335 or The Attrition Act of 2005 9.This was enacted to improve the revenue collection performance of the
BIR and the Bureau of Customs through the creation of a Revenue Performance
Evaluation Board and of a Rewards and Incentives Fund

Police Power. 10.It refers to the power of the state to enact laws to promote public health, public
morals, public safety and the general welfare of the people.

ENUMERATION: On the space provided, enumerate the following: (For BSBA students: Answer items number 1, 2, 4 & 6
only)

1. Aspect of taxation 4. Power of the State

● Levying of thd tax. •Taxation

● Collection of the tax levied. •Eminent Domain. • Police Power

2. Basic principles of a Sound Tax System 5. Inherent Limitation of Power of Taxation

● Fiscal adequacy. • Purpose. •Territoriality

● Equality or theoretical justice. •international comity

● Administrative feasibility. •Exemption. • Non-delegation

3. Essential characteristics of a Tax 6. Classification of Taxes as to subject matter

● It Is an enforced contribution. •personal,poll or capitation

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NAME: ____________________________________
PRE-MIDTERM EXAMINATION - TAXATION

● It is levied by the lawmaking body. •property. •excise

● It is proportionate in character

● It is generally payable in money

● It is imposed for the purpose of raising revenues

● It is to be used for public purpose.

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