EXERCISE DRILLS

Topic: Fundamental Principles of Taxation, Tax Laws, and Tax Administration

Reviewer: Marc Myer G. De Asis, CPA, MBA

1. The primary purpose of taxation is:

a. To enforce contribution from its subject for private purpose
b. To raise revenue for the government
c. To achieve economic and social stability
d. To regulate the conduct of business or profession

2. Select the correct statement.

a. The benefit received theory explains that the government is obliged to serve the people since it is
benefiting from the tax collection from its subjects
b. The lifeblood theory underscores that taxation is the most superior power of the state
c. The police power of the state is superior to the non-impairment clause of the Constitution.
d. The power of taxation is superior to the non-impairment clause of the Constitution

3. The point in which tax is levied is called?

a. Impact of taxation c. Incidence of taxation
b. Situs of taxation d. Assessment

4. In case of doubt of exemption, doubt shall be resolved

a. Strictly against the government c. Liberally in favor of the taxpayer
b. Strictly against the courts d. Liberally in favor of the government

5. When the provision of the law is vague as to the taxation of a tax object, doubt is resolved
a. Strictly against the government c. Liberally in favor of the government
b. Strictly against the taxpayer d. Liberally in favor of the courts

6. A tax reform at any given time underscores the fact that:

a. taxation is inherent power of the State. c. taxation is a very broad power of the State.
b. essentially a legislative power. d. the State can and should adopt progressive taxation.

7. Which of the following is an administrative act in taxation?

a. Collection of taxes c. Determination of the subject of the tax
b. Fixing the rate of the tax d. Determination of the purpose of the tax

8. Which is an incorrect application of situs of taxation?

a. Persons are subject to tax at their place of residence.
b. Businesses are subject to tax where they conduct business.
c. Intangible properties are subject to tax where they are physically located.
d. Transfers are subject to tax depending on the residence, citizenship and location of the property
transferred.

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 EXERCISE DRILLS
Topic: Fundamental Principles of Taxation, Tax Laws, and Tax Administration
Reviewer: Marc Myer G. De Asis, CPA, MBA

9. Statement 1: The CIR can assign internal revenue officers to establishments where articles subject to excise
tax are produced or kept.
Statement 2: The Regional Director of Revenue Region No. 11 delegated by the Commissioner of Internal
Revenue can recommend the promulgation of rules and regulations to the Secretary of Finance.

a. Both statements are true

b. Both statements are false
c. Only statement 1 is true.
d. Only Statement 2 is True

10. Statement 1: The Bureau of Internal Revenue consists of one (1) Chief officer and five (5) assistant chief
officers.
Statement 2: Revenue Memorandum Circulars are also sources of tax laws in the Philippines.
a. Statement 1 is True; Statement 2 is False
b. Statement 2 is True; Statement 1 is False
c. Statement 1 is True; Statement 2 is True
d. Statement 2 is False; Statement 1 is False

11. Which is an indirect tax?

a. Community tax c. Income tax
b. Transfer tax d. Business tax

12. A tax system which is not directly practiced in the Philippines

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

13. When the impact and incidence of taxation are merged into the statutory taxpayer, the tax is called?
a. personal tax c. indirect tax
b. direct tax d. national tax

14. The following are inherent limitation on the power to tax. Which is the exception?
a. Territoriality of taxes c. Public purpose
b. Legislative in character d. Non-appropriation for religious purpose

15. Which is not a source of tax law?

a. Judicial decisions c. Local ordinances
b. Opinion of tax authors d. BIR rulings

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