Q NO.

1. SARA sells shoes in Davao through a retail store. She pays the VAT on her gross sales to the
BIR and the municipal license tax based on the same gross sales to the City of Davao. She comes
to you for advice because she thinks he is being subjected to double taxation.
What advice will you give her?
Ans. I will advice Sara to chill out because there’s no double taxation in her case. There is
double taxation when the same taxpayer is taxed twice when he should be taxed only once for
the same purpose by the same taxing authority within the same jurisdiction during the same
taxing period, and the taxes are of the same kind or character. (kamo na bahala guys mag explain
ha ha)
2. For purposes of real property taxes, the tax rates are applied on:
(A) Zonal values;
(B) Fair market value;
(C) Assessed values;
(D) Reproduction values.

Q NO. 2
1. Explain the principles of a sound tax system.
Ans. The following are the principles of sound tax system, to wit;
Fiscal adequacy. The sources of revenue should be adequate to meet government
expenditures and their variations. (Chavez vs Ongpin, GR No. 76778, June 6, 1990)
Administrative feasibility. Tax system should be capable of being effectively
administered and enforced with the least inconvenience to the taxpayer.
However, even if the imposition is burdensome to the taxpayer, the tax imposition is not
necessarily invalid unless some aspect of it is shown to violate any law or the Constitution. (Diaz
vs Secretary of Finance, where the VAT on toll way fess was questioned as burdensome)
Theoretical justice or equality. The tax burden should be in proportion to the taxpayer’s
ability to pay. This is the so-called ability to pay principle. Taxation should be uniform as well as
equitable.
2. The appraisal, assessment, levy and collection of real property tax shall be guided by the
following principles. Which statement does NOT belong here?
(A) Real property shall be appraised at its current and fair market value;
(B) Real property shall be classified for assessment purposes on the basis of its actual use;
(C) Real property shall be assessed on the basis of a uniform classification within each local
political subdivision;
(D) The appraisal and assessment of real property shall be based on audited financial
statements of the owner.

Q NO. 3
1. MANNY leased a piece of land owned by the City of General Santos and built a warehouse on
the property for his business operations. The City Assessor assessed MANNY for real property
taxes on the land and the warehouse. MANNY objected to the assessment, contending that he
should not be asked to pay realty taxes on the land since it is a property owned by the city. Was
the assessment proper?
Ans. ?
2. 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
(B)Lifeblood theory
(c) Sumptuary theory
(D) Symbiotic doctrine

Q NO. 4
1.ISKO owns real property in the City of Manila. On June 1, 2021, he received a notice of
assessment from the City Assessor, informing him of a deficiency tax on his property. He wants
to contest the assessment.
What are the administrative remedies available to ISKO in order to contest the assessment and
their respective prescriptive periods?
Ans?
2. TRUE OR FALSE. Justify your answer..
A nonresident alien individual engaged in trade or business in the Philippines shall be subject to
an income tax in the same manner as an individual citizen and a resident alien individual, on
taxable income received from all sources within and without the Philippines.
Ans. False. A nonresident alien individual engaged in trade or business in the Philippines shall
be subject to an income tax in the same manner as an individual citizen and a resident alien
individual, on taxable income received from all sources within the Philippines.

Q NO. 5
1. Under the tax code, all criminal violations may be compromised except for two instances.
What are these instances?
Ans. All criminal violations may be compromised except: (a) those already filed in court, or (b)
those involving fraud. SEC 204 NIRC
2. TRUE OR FALSE. Justify your answer.
An individual taxpayer can adopt either the calendar or fiscal period for purposes of filing his
income tax return.
Ans. False. Calendar period only

Q NO. 6
1. What are the two instances when the Commission may abate or cancel a tax liability?
Ans. (B)  Abate or Cancel a Tax Liability, when:
(1)  The tax or any portion thereof appears to be unjustly or excessively assessed; or
(2)  The administration and collection costs involved do not justify the collection of the
      amount due. SEC 204 NIRC
2. TRUE OR FALSE. Justify your answer.
No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with
the Commissioner a claim for credit or refund within three (3) years after the payment of the tax
or penalty.
Ans. False. Within 2 years

Q NO. 7
1. What are the two instances when the Commission may compromise the payment of any
internal revenue tax?
Ans. (A)  Compromise the Payment of any Internal Revenue Tax, when:
(1)  A reasonable doubt as to the validity of the claim against the taxpayer exists; or
(2)  The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax.
SEC 204 NIRC
2. TRUE OR FALSE. Justify your answer.
As a general rule, internal revenue taxes shall be assessed within three years after the last day
prescribed by law for the filing of the return or from the day the return was filed, whichever
comes first.
Ans. False. As a general rule, internal revenue taxes shall be assessed within three years after the
last day prescribed by law for the filing of the return or from the day the return was filed,
whichever comes Last. (SEC. 203, NIRC)

Q NO. 8
1. Enumerate the 3 stages or aspects of taxation. Explain each.
Ans. [1] Levy or imposition. This process involves the passage of tax laws or ordinances
through the legislature or through a local lawmaking body (e.g. sanggunian). The tax laws to be
passed shall determine those to be taxed (person, property or rights), how much is to collect (the
rate and the base of tax), and how taxes are to be implemented (the manner of imposing and
collecting tax; i.e. tax remedies). It may also include the grant of tax exemptions, tax amnesties
or tax condonation.
[2] Assessment and Collection. This process involves the act of administration and
implementation of tax laws by the executive through its administrative agencies such as the
Bureau of Internal Revenue (BIR) or Bureau of Customs (BOC).
[3] Payment. This process involves the act of compliance by the taxpayer in contributing his
share to pay the expenses of the Government. Payment of tax also includes the options, schemes
or remedies as may be legally open or available to the taxpayer.

2. The following powers of the Commissioner shall not be delegated, EXCEPT for one:
a. The power to recommend the promulgation of rules and regulations by the Secretary of
Finance.
b. The power to issue rulings of first impression or to reverse, revoke or modify any existing
ruling of the Bureau.
c. The power to compromise or abate, under Sec. 204 (A) and (B) of the Tax Code, of
assessments issued by regional offices involving basic deficiency taxes of P500,000.00 or less.
d. The power to assign or reassign internal revenue officers to establishments where
articles subject to excise tax are produced or kept.
Q NO. 9
1. Distinguish a direct from an indirect tax and give an example for each one.
Ans. A direct tax is one that the taxpayer pays directly to the government. These taxes cannot be
shifted to any other person or group. An indirect tax is one that can be passed on-or shifted-to
another person or group by the person or business that owes it.
Example of direct tax: income tax
indirect tax- VAT
2. TRUE OR FALSE. Justify your answer.
The power to decide disputed assessment, refunds of internal revenue taxes, fees or other
charges, penalties imposed in relation thereto, or other matter arising under the Tax Code or
other laws or portion thereof administered by the BIR is vested in the Commissioner, subject to
the exclusive appellate jurisdiction of the Secretary of Finance.
Ans. False. Subject to appellate jurisdiction of CTA (SEC.4, NIRC)

Q NO. 12
1. The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue,
issued a Revenue Regulation using gross income as the base for corporations doing business in
the Philippines. Is the Revenue Regulation valid?
Ans. No, net taxable income
2. The following taxes, fees and charges are deemed to be national internal revenue taxes,
EXCEPT:
a. Documentary stamp taxes
b. Value-added tax
c. Real property tax
d. Excise taxes

Q NO. 13
1. May taxes be the subject of set-off or compensation?
Ans. No. Taxes cannot be subject of set-off or compensation because taxes are the lifeblood of
the government and so should be collected without unnecessary hindrance. (Philex Mining case)
2. The actual effort exerted by the government to effect the exaction of what is due from the
taxpayer is known as
A. assessment.
B. levy.
C. payment.
D. collection.

Q NO. 15
1. What meant by taxable income?
Ans. SEC. 31. Taxable Income Defined. -The term ‘taxable income’ means the pertinent items
of gross income specified in this Code, less the deductions, if any, authorized for such types of
income by this Code or other special laws. 
2. Who can avail of 8% tax on GS or GR and ONOI in excess of 250,000 in lieu of graduated
income tax rates under Sec. 24 (A)(2)(a) and percentage tax under Sec. 116?
Ans. Self-employed Individuals and/or Professionals Whose Gross Sales or Gross Receipts and
Other Non-operating Income Does Not Exceed the Value-added Tax(VAT) Threshold as
Provided in Section 109(BB).
Q NO. 16
1. From what sources of income are the following persons/corporations taxable by the Philippine
government?
1) Citizen of the Philippines residing therein;
Ans. Within and without
2) Non-resident citizen;
Ans. Within
3) An individual citizen of the Philippines who is working and deriving income from abroad as
an overseas contract worker;
Ans. Within
4) An alien individual, whether a resident or not of the Philippines;
Ans. Within
5) A domestic corporation;
Ans. Within and without
2. How does "Income" differ from "capital"? Explain.
Ans. Income vs. Capital
1. Income refers to any wealth which flows into the taxpayer other than a mere return of
capital; whereas, capital constitutes the investment which is the source of income.
2. Income is the flow; whereas, capital is the fund

Q NO. 17
1. What is "gross Income" for purposes of the Income tax?
Ans. Gross income means all income derived from whatever source, including (but not limited
to) the following items:
(1) Compensation for services in whatever form paid, including, but not limited to fees, salaries,
wages, commissions, and similar items;
(2) Gross income derived from the conduct of trade or business or the exercise of a profession;
(3) Gains derived from dealings in property;
(4) Interests;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Annuities;
(9) Prizes and winnings;
(10) Pensions; and
(11) Partner's distributive share from the net income of the general professional partnership.

2. TRUE OR FALSE. Justifiy your answer.

Corporations with net taxable income not exceeding 5 million and with total assets not exceeding
100 million, excluding land on which the particular business entity's office, plant, and equipment
are situated during the taxable year for which the tax is imposed, shall be taxed at 25%.
Ans. False. Only 20% (TAX RATES ON DOMESTIC COPR, SEC. 27)
Q NO. 18
1. Effective July 1, 2020, what is the normal income tax rate for Domestic Corporation?
Ans. Except as otherwise provided in this Code, an income tax rate of twenty-five percent (25%)
effective July 1, 2020, is hereby imposed upon the taxable income derived during each taxable
year from all sources within and without the Philippines by every corporation, as defined in
Section 22(B) of this Code and taxable under this Title as a corporation, organized in, or existing
under the laws of the Philippines. 
Provided, That corporations with net taxable income not exceeding Five million pesos
(P5,000,000.00) and with total assets not exceeding One hundred million pesos
(P100,000,000.00), excluding land on which the particular business entity's office, plant, and
equipment are situated during the taxable year for which the tax is imposed, shall be taxed at
twenty percent (20%).
2. TRUE OR FALSE. Justify your answer.
The total exclusion of 13th month pay and other benefits under Sec. 32(B)(7)(e) shall not exceed
P82,000.00.
Ans. False. P90,000
Q NO. 19
1. Can the Commissioner of Internal Revenue inquire into the bank deposits of a taxpayer? If so,
does this power of the Commissioner conflict with R.A. 1405 (Secrecy of Bank Deposits Law)
Ans. Notwithstanding any contrary provision of Republic Act No. 1405, Republic Act No. 6426,
otherwise known as the Foreign Currency Deposit Act of the Philippines, and other general or
special laws, the Commissioner is hereby authorized to inquire into the bank deposits and other
related information held by financial institutions of:
(1) A decedent to determine his gross estate; and
(2) Any taxpayer who has filed an application for compromise of his tax liability under Section
204(A)(2) of this Code by reason of financial incapacity to pay his tax liability. SEC 6F NIRC
2. Give the remedies available to local government units to enforce the collection of taxes, fees,
and charges?
Ans. Administrative and Judicial remedies