Republic of the Philippines

CAMARINES NORTE STATE COLLEGE

F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600, Philippines

College of Business and Public Administration

Summ
BA 101 - Taxation
First Semester, AY 2022-2023
Midterm Period – Pre Test & Post Test A

Name: Score:
Course, Year Level & Block Date:
Section:

POST-TEST

Test I. (5 pts each) Odd one out. Identify (encircle the letter only) the correct statement among
the set of sentences below:

1. A. Generally, taxes are paid in money. Payment of taxes in kind violates one of the basic
principles of a sound tax system – theoretical justice.

Payment in kind impedes ADMINISTRATIVE FEASIBILITY (convenient enforcement)

because if allowed by default, the time that the government allocates in collection
of taxes will be reduced by time allocated for disposal/ realization of properties.

B. Taxes are levied by the head of the nation, in the case of the Philippines – by President
Ferdinand Marcos Jr.

Taxes are levied by the Congress. Remember: Levying is the imposition of taxes and
imposing means enactment of tax laws. The executive branch only ensures the
proper collection and assessment of taxes.

C. Taxes are proportionate in character. Thus, the relationship between income and taxes is
directly proportional.

Higher income = higher taxes; lower income = lower taxes

2. A. Consent is immaterial in the valid imposition and collection of tax.

Taxation is an inherent power of the state. Tax is a burden. Whenever due, you have to pay
it by hook or by crook.

B. The power to tax cannot be delegated to local governments or political subdivisions.

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 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600, Philippines

College of Business and Public Administration

Summ
The administrative implementation of a tax law can be delegated locally.

C. The Lifeblood Doctrine mandates that the government should not incur a deficit because
it will paralyze the government and impede its processes. This is in consonance with one
elements of a sound taxation system – administrative feasibility.

The element being referred to here is FISCAL ADEQUACY. This element emphasizes
that the source of revenues must be always enough so that the public goals will be
met. This is also anchored with Lifeblood Doctrine and Necessity Theory.

3. A. The wealthy must be taxed more than the poor. This is an application of the Doctrine of
Symbiotic Relationship.

Doctrine of Symbiotic Relationship = You must pay because you receive. (Parang
science concept na mutualism)

The correct answer is Ability to Pay Theory or element of Theoretical Justice.

B. The enforcement of tax system must be simple as possible, and should minimize intricacy.

In accordance with the element of administrative feasibility.

C. Levying is the process of ascertaining the tax due under the law from a tax payer.

Ascertaining the tax due = Assessment

4. A. Between the legislative function and the administrative aspect, selecting the object or
subject of tax is best described as the focus of the former.

Again, Levying = Imposition of taxes. Sa pag e-enact ng batas na a-identify kung anong right,
privilege, transaction, property or individual ang dapat i-tax.

B. Under the Tax Code, the power to interpret tax laws, decide tax cases and issue summons
and subpoena is a power granted to the House of Representatives and Senate.

This is an executive function – to be more specific, a function of Bureau of Internal Revenue

and its Commissioner.

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 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600, Philippines

College of Business and Public Administration

Summ

C. The principal purpose of Taxation is to reduce inequalities of wealth and to ensure that the
disparity among the classes is narrowed down.
This falls only on the secondary purpose (also known as compensatory purpose).
The principal purpose of taxation is revenue generation.

5. A. After a final judgment in court, 3 out of 4 massage parlors in Daet has been
regarded as a façade for prostitution. The Sangguniang Bayan, headed by Jack,
passed a tax ordinance subjecting all massage parlors to a higher tax. This in turn,
left the parlors with no other way but cease in operation. This is a valid exemplification
of the statement “The Power to Tax includes the Power to Destroy.”

This is one manifestation of Tax being an inherent power of the State. It can kill
business operations. This is also an example where the power to Tax coincides
with police power.

B. A provision on taxation in the Philippine Constitution is a grant of power.

Limitation on the Use of Power.

C. The Congress passed a tax bill that improves the Sugar industry. This is a void use
of Tax Power because Tax must be made for a public purpose.

Sugar is consumed by majority of Filipinos. Although the sugar industry is a specific

industry, passing a tax bill in its favor is still a public because majority of Filipinos
will be benefited and thus, a valid imposition of the power to tax.

6. A. One taxpayer is compelling the BIR employee to accept his payment in a form of a
bitcoin/ cryptocurrency. The employee cannot refuse to accept the payment on the
ground that it is not a legal tender.

A bitcoin is not a legal tender and not a formal currency in the Philippines. Thus,
the BIR employee CAN REFUSE to accept it as a form of payment.

B. Taxes are civil and not penal in nature.

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 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600, Philippines

College of Business and Public Administration

Summ
Yes, there are penalties in late payment of taxes, but generally, it does not equate to
crime. The remedy in tax regressions is more inclined to collection and not
imprisonment. Thus, the burden of proof, the appeals process, the statutes of
limitations are generally more lenient than a case involving crimes. (Kaya pala kahit
may pending tax case, pwedeng tumakbong…charot)

C. Taxation can exist without sovereignty of the State.

Taxation is independent of Constitution but of course, Taxation cannot exist without

sovereignty. It is actually an outcome of sovereignty. Because a country is free, it
must have a government to rule over its jurisdictions, and with government comes
taxes for the office to suffice.

7. A. A tax cannot be imposed without clear and express words for that purpose.

General rule : Tax does not require consent.

Exception: Tax should have a basis. (Due Process) A clear and concise tax laws is
a necessity (admin feasib.)

B. Despite the tax being an inherent power of the State, the Constitution may abolish
the power to tax.

The power to tax does not arise from the Constitution, thus, the Constitution cannot
abolish the power to tax. As long as the country is sovereign, the power to tax is
ALWAYS existent.

C. Taxation is the most absolute and yet the weakest among all the powers of the
Government.

It is the strongest, because it is the most important. (Necessity Theory & Lifeblood
Doctrine)

8. A. Without taxes, the government would be paralyzed for the lack of the motive power
to activate and operate it. Indeed, the government is the lifeblood of taxation.

Taxation is the lifeblood of the government. :D

B. Generally, there is no limit on the amount of tax to be imposed.

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 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600, Philippines

College of Business and Public Administration

Summ
Taxation is unlimited. Tax may go as high as P1B, as long as it’s proportionate to
one’s earning capacity.

C. The reciprocity rule states that there are only constitutional and no inherent
limitations.
There are two usages for the word reciprocity in the principles of taxation, however,
the above statement does not belong to any of its provisions. (Hence, there are
inherent and constitutional limitations.)

Reciprocity Theory = Benefits Received = Doctrine of Symbiotic Relationship

Reciprocity rule: Pag tinax mo yung citizen ko, ita tax ko rin yung citizen mo. Pag
exempt ung citizen ko sa country mo, exempt na rin ung sa country ko yung citizen
mo.

Another example, kung ang CPA sa Phil ay considered na CPA na rin sa US, then ang
CPA sa US ay considered as CPA na rin sa Phil (Yun nga lang, walang reciprocity rule
in both countries kaya nag eexam pa ulit tayo para ma recognize as CPA abroad).

9. A. There should be direct receipt of benefit before one could be compelled to pay
taxes.

We cannot refuse to pay taxes because receipt of benefits is conclusively presumed.

(Although silent, we refer to indirect benefits)

B. The taxpayer cannot delay the payment of tax to wait for the resolution of a lawsuit
involving his pending claim against the government.

This is why compensation/off-set is Generally not permitted/ encouraged.

C. The Philippine Income Tax System is indirect and progressive in nature.

DIRECT. Generally not transmissible or cannot be shifted.

10. A. Taxation is onerous.

Onerous = Burdensome. Yes, tax is indeed a burden.

B. The receipt of direct benefits by taxpayers is conclusively presumed.

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 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600, Philippines

College of Business and Public Administration

Summ

The receipt of INDIRECT benefits is conclusively presumed. Syempre hindi pwedeng

direct, kasi hindi man lahat directly recipient ng mga government programs. Pero sa
mga roads, bridges, security and other indirect benefits, indubitably, lahat tayo
beneficiary.

C. Taxation is comprehensive, plenary, supreme and absolutely unlimited.

COMPREHENSIVE = Malawak ang extent

PLENARY = complete and covered lahat -> persons properties privileges transactions
SUPREME = highest degree; most important; strongest
UNLIMITED = but not absolute; because there are limitations

Test II. (2 pts each) Fill in the blanks. Complete the statements below.
Warning: The clue may be harder than the Tax question itself.

1. Taxes are enforced contributions. Thus, it is pecuniary in nature. (No good in goodbyes, but this
word ends with Y)

2. Compensation is a mode of extinguishing to the concurrent amount, the obligations of those

persons who in their own right are reciprocally debtors and creditors of each other. (Your hard work
always pays off but the meaning of this word isn’t about pays)

3. Prescription is effect of the lapse of time in creating and destroying rights. (An apple a day keeps
the doctor away, and you bet, this word hates apple)

4. A good tax system must be based on the taxpayer’s ability to pay. This exemplifies one of the
elements of a good Tax system known as Theoretical Justice (Justus is there to kill.)

5. If Lifeblood Doctrine states that the Government needs Tax, what theory states that the Society
needs the Government? Necessity Theory (“If you turn a blind eye to people in NEED, then you’re
the problem.” Leonora, Darna 2022)

6. The Benefits Received Theory presupposes that the more benefit one receives from the
government, the more taxes he should pay. However, this theory is counteracted by another theory,
which states that those who have less shall contribute less even if they receive more of the benefits
from the government. What is this theory called? Ability to Pay Theory / Theoretical Justice (Test,
mic test, Test, 1, 1C, 3A)

7. Tax is onerous. This highlighted word means that tax is burdensome (Some word starts with B den
ends with e)

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 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600, Philippines

College of Business and Public Administration

Summ
8. Legal Tender is anything recognized by law as a means of payment and that the creditor is legally
obligated to accept. (came from a French word which means to offer; to offer, oops, the word has
been mentioned again on Test I.)

9. The items subject to this tax are perceived to be vices, harmful or costly to the society.

Sin Tax(no reply)

10. It is the fundamental law of the Land. Constitution. (Taxation: Hold my beer)

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