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Week 1: Principles of Taxation Glenalyn M. Acollador

Choose the best answer.

1. The principal purpose of taxation is_____.

a. To encourage the growth of home industries through the proper use of tax
exemptions and tax incentives.
b. To implement the police power of the state.
c. The reduce excessive inequalities of wealth.
d. To raise revenues for the governmental needs.

2. Taxation as distinguished from police power and power of eminent domain.

a. Property is taken to promote the general welfare.
b. Maybe exercised only by the government.
c. Operates upon the whole citizenry.
d. There is generally no limit as to the amount that may be imposed.

3. This is an inherent limitation on the power of taxation.

a. Rule on uniformity and equity in taxation.
b. Due process of law and equal protection of the laws.
c. Non-impairment of the jurisdiction of the Supreme Court in tax cases.
d. Tax must be for public purpose.

4. This is a constitutional limitation on the power of taxation.

a. Tax laws must be applied within the territorial jurisdiction of the state.
b. Exemption of government agencies and instrumentalities from taxation.
c. No appropriation of public money for religious purposes.
d. Power to tax cannot be delegated to private persons or entities.

5. Basic principles of a sound tax system, except

a. Fiscal adequacy c. administrative feasibility
b. Equality or theoretical justice d. Intellectual sensitivity

6. The tax imposed should be proportionate to the taxpayer’s ability to pay.

a. Fiscal adequacy c. administrative feasibility
b. Equality or theoretical justice d. Economic consistency

7. The sources of revenue as whole should be sufficient to meet the demands of public
expenditures.
a. Fiscal adequacy c. administrative feasibility

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Week 1: Principles of Taxation Glenalyn M. Acollador

b. Equality or theoretical justice d. Revenue generation

8. The laws must be capable of convenient, just, and effective administration.

a. Fiscal adequacy c. administrative feasibility
b. Equality or theoretical justice d. Internal acceptability

9. Our National internal Revenue Laws are ___.

a. Political in nature c. Criminal in nature
b. Penal in nature d. Civil in nature

10. The levying or imposition of tax and the collection of the tax are processes which constitute
the taxation system.
a. Basis of taxation c. Nature of taxation
b. Aspects of taxation d. Theory of taxation

11. Persons or things belonging to the same class shall be taxed at the same rate.
a. Simplicity in taxation c. Equality in taxation
b. Reciprocity in taxation d. Uniformity in taxation

12. The following are the nature of taxation, except

a. Inherent in sovereignty
b. Essentially legislative in character
c. Subject to inherent and constitutional limitations
d. Subject to approval by the people

13. The existence of the government is a necessity and that the state has the right to compel
all individuals and property within its limits to contribute.
a. Basis of taxation c. Scope of taxation
b. Situs of taxation d. Theory of taxation

14. It is the privilege of not being imposed a financial obligation to which others are subject.
a. Tax incentive c. Tax amnesty
b. Tax exemption d. Tax credit

15. Which of the following is nature of taxation?

a. The power is exercised by legislative action.
b. It is essentially an administrative function.
c. It is generally payable in money.
d. Without it the state can continue to exist.

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16. The use of illegal or fraudulent means to avoid or defeat the payment of tax
a. Shifting c. Avoidance
b. Exemption d. Evasion

17. The use of legal or permissible means to minimize or avoid taxes.

a. Shifting c. Avoidance
b. Exemption d. Evasion

18. In every case of doubt, tax statutes are construed ____.

a. Strictly against the government and the taxpayer
b. Liberally in favor of the government and the taxpayer
c. Strictly against the government and liberally in favor of the taxpayer
d. Liberally in favor of the government and strictly against the taxpayer

19. Tax imposed upon the performance of an act, the enjoyment of privilege or the engaging
in an occupation.
a. Personal, poll, or capitation c. Excise
b. Property d. Regressive

20. Tax which is demand from the person whom the law intends or desires to pay it.
a. Direct c. Excise
b. Indirect d. Percentage
21. Tax of a fixed proportion of the amount or value of the property with respect to which the
tax is assessed.
a. Excise c. Specific
b. Ad-valorem d. Percentage

22. The strongest of all inherent powers of the state because without it, the government can
neither survive nor dispense any of its other powers and functions effectively.
a. Police power c. Power of taxation
b. Power of eminent domain d. Power of recall

23. 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. Income tax liabilities shall be paid by the inhabitants even if foreign invaders
occupy our country.
c. Taxes may be imposed retroactively by law, but unless so expressed by such law,
these taxes must only be imposed prospectively.
d. Tax laws are either political or penal in nature.

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Week 1: Principles of Taxation Glenalyn M. Acollador

24. Which of the following is not a characteristic or element of a tax?

a. It is an enforced contribution. c. It is based on the ability to pay.
b. It is legislative in character. d. It is payable in money or in kind.

25. The power to impose taxes is exercised by ____.

a. The President c. Bureau of Internal Revenue
b. The Supreme Court d. Congress

26. One of the characteristics of internal revenue laws is that they are ___.
a. Criminal in nature c. Political in nature
b. Penal in nature d. Generally prospective in application

27. Which of the following statements is not correct?

a. Taxes may be imposed to raise revenues or to provide disincentives to cerrtain
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 Philipine Constitution are grants of power enabling
the state to impose tax.

28. Which tax principle is described in the statement “The more income earned by the
taxpayer, the more tax he has to pay.”
a. Fiscal adequacy c. administrative feasibility
b. Theoretical justice d. Inherent in sovereignty

29. Which of the following statements is wrong? A revenue bill ____.

a. Must originate from the House of Representatives and on which same bill the
Senate may propose amendments
b. May originate from the Senate and on which same bill the House of
Representatives may propose amendments
c. May have a House version and a Senate version approved separately, and then
consolidated, with both houses approving the consolidation version
d. May be recommended by the President to Congress

30. Under this basic principle of a sound tax system, the Government should not incur a deficit.
a. Theoretical justice c. Fiscal adequacy
b. Administrative feasibility d. Uniformity in taxation

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Week 1: Principles of Taxation Glenalyn M. Acollador

31. No person shall be imprisoned for non-payment of this tax.

a. Excise tax c. income tax
b. Value added tax d. poll tax

32. Which of the following is not acceptable for legally refusing to pay the tax?
a. That the right of the state to collect the tax has prescribed
b. That there is no jurisdiction to collect the tax
c. That the tax law was declared as unconstitutional
d. That there is no benefit derived from the tax

33. A law granting tax exemption requires the concurrence of ___.

a. Majority vote members of Congress
b. 2/3 vote of member of Congress
c. ¾ vote of members of Congress
d. Unanimous vote of members of Congress

34. Which of the following are National Internal Revenue Taxes?

I. Income Tax II. Estate tax III. Donor’s Tax
IV. Value added tax V. Other percentage tax VI. Excise tax
VII. Documentary stamp tax
a. I, II, III, IV c. I, II, III, IV, V, VI
b. I, II, III, IV, V d. I, II, III, IV, V, VI, VII

35. [1] The property taken in police power is destroyed while the property taken under the
power of eminent domain and power of taxation are not destroyed.
[2] In power of taxation, the compensation received is the protection afforded to the
citizens; in police power the compensation received is the altruistic feeling that somehow
you contributed to the promotion of the general welfare; in power of eminent domain, the
compensation receive is the just compensation paid for the property taken.
a. True, true c. False, true
b. True, false d. False, false

36. [1] The point on which a tax is originally imposed of taxation

[2] The point on which a tax burden finally rests or settles down is incidence of taxation.
a. True, true c. False, true
b. True, false d. False, false

37. [1] Tax is a demand of sovereignty

[2] Toll is a demand of sovereignty
a. True, true c. False, true
b. True, false d. False, false

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Week 1: Principles of Taxation Glenalyn M. Acollador

38. [1] The President has the power to veto a revenue bill even if such bill was already
approved by Congress
[2] The President is superior to Congress as he/she veto any bill even already approved
by Congress
a. True, true c. False, true
b. True, false d. False, false

39. Money collected from shall not be paid to any religious dignitary except when____.
a. The religious dignitary is assigned to the Philippine Army
b. It is paid by a local government unit
c. The payment is passed in audit by the COA
d. It is part of a lawmakers’ pork barrel

40. 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 theory

41. The actual effort exerted by the government to effect the exaction of what is due from the
taxpayer is known as ____.
a. Assessment c. payment
b. Levy d. Collection

42. What is the tax mechanism granted by law to VAT-registered taxpayers regarding their
input VAT?
a. Tax capitalization c. Tax credit
b. Tax transformation d. Tax shifting

43. Which of the following is not a tax mechanism to minimize the impact of double taxation?
a. Tax shifting c. Tax capitalization
b. Tax levy d. Tax transformation

44. Who has the authority to veto the Taxation Bill passed by the Congress?
a. Supreme Court c. Either a or b
b. President d. Neither a nor b

45. Which of the following government agencies may exercise the law-making power of
taxation?
a. Local government units c. Bureau of Customs

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Week 1: Principles of Taxation Glenalyn M. Acollador

b. Bureau of Internal Revenue d. All of the above

46. What is the rationale behind the constitutionally delegated taxation power of local
government unit?
a. To promote local autonomy
b. To advocate national policy
c. To encourage separation from national government
d. To advocate federalism

47. Which of the following statements is false?

a. The rule of taxation shall be uniform an equitable
b. The Congress shall evolve a progressive system of taxation
c. The Senat can neither propose nor concur with amendments on revenue or tariff
bills
d. The President shall the power to veto any particular item or items in a revenue or
tariff bill, but the veto shall not affect the item or item to which he does not object

48. In which inherent the power of the state will the affected citizen receive a direct benefit?
a. Power of eminent domain c. Power of taxation
b. Police power d. None of the above

49. Which version of tax bill may be passed into a tax law?
a. Version of the House of Representatives
b. Version of the Senate
c. Either a or b
d. Neither a nor b

50. What type of veto may be exercised by the President over tax bill?
a. Absolute or Total Veto c. Both a and b
b. Item Veto d. Neither a nor b

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