TAXATION

SUMMATIVE ASSESSMENT #1 (Part 1) MC & TF

YELLOW – Correct Answer

RED – Wrong answer

Question 1
Tax assessment is a process of taxation that involves the passage of tax laws.
ANSWER: FALSE

Question 2
Forward tax shifting basically has the effect of price reduction in relation to tax.
ANSWER: FALSE

Question 3
Eminent domain involves confiscation of prohibited commodities to protect the well-being of
the people.
ANSWER: TRUE

Question 4
The doctrine of escape from taxation where prices of goods are reduced so that the amount of
taxes is added as part of the selling price without distorting the original price is called:
-tax capitalization
-tax transformation
-tax avoidance
-tax shifting
ANSWER: tax capitalization

Question 5
Tax includes the power to destroy
ANSWER: TRUE

Question 6
The power of the state to take private property with just and fair compensation intended for
public purpose is called:
-power of the president
-power of taxation
-power of eminent domain
-police power
ANSWER: power of eminent domain

Question 7
The power of taxation in relation to scope is considered as the following, except
-supreme
-comprehensive
-individualistic
-complete
ANSWER: supreme

Question 8
The head of the executive branch exercises the power of taxation subject to limitation.
ANSWER: FALSE

Question 9
The three inherent powers of the State cannot be delegated.
ANSWER: FALSE

Question 10
2/3 of all members of Congress is required to pass a tax exemption law.
ANSWER: FALSE

Question 11
Taxes that cannot be shifted by the statutory taxpayer are referred to as direct taxes.
ANSWER: TRUE

Question 12
Expenses incurred by the employee but which are paid for or reimbursed by the employee are
taxable fringe benefit, except when the expenditures are duly receipted for and in the name of
the employer and the expenditures do not partake the nature of a personal expense
attributable to the employee.
ANSWER: TRUE

Question 13
Taxation is separable with the State, hence, it is considered inherent.
ANSWER: FALSE

Question 14
The term "uniformity in taxation" refers to:
-the system of having more direct taxes than indirect taxes
-the principle that all subjects of taxation under the same class shall be treated alike
-the amount of enforced shall be proportional on an individual's income
-the concept or process of segregating funds for government expenditures
ANSWER: the principle that all subjects of taxation under the same class shall be treated alike

Question 15
Taxation is subject to inherent and constitutional limitations.
ANSWER: TRUE
Question 16
Taxes are generally broader than custom duties, since the latter includes charges on all
imported and exported goods.
ANSWER: FALSE

Question 17
Levying of taxes refers to the appraisal and valuation of the subject of taxation.
ANSWER: FALSE

Question 18
There should be personal benefit enjoyed from the government before one is required to pay
tax.
ANSWER: FALSE

Question 19
The subject income of taxation is determined by the following situs, except:
-residence of the taxpayer
-citizenship of the taxpayer
-location where the income was earned
-classification of income earned
ANSWER: classification of income earned

Question 20
Thirteenth month pay and other benefits received by officials and employees of public and
private entities are exempt provided, however, that the total exclusions shall not exceed
P82,000.
ANSWER: TRUE

Question 21
Excise tax is a tax that is imposed upon the performance of an act, the enjoyment of a privilege
or the engagement in a profession.
ANSWER: TRUE

Question 22
The power of eminent domain, like the police power, may defeat the Philippine Constitution's
provision on the right of the person.
ANSWER: TRUE

Question 23
Taxation is an enforce imposition of contribution to generate revenue.
ANSWER: TRUE
Question 24
CHED regulations is one source that becomes part of tax laws.
ANSWER: FALSE

Question 25
When tax is collected upon someone who is effectively reimbursed by another, the tax is
regarded as illegal.
ANSWER: FALSE

Question 26
The levying or the distraint of taxpayer's property for tax delinquency can be considered as a
tax act that is administrative in nature.
ANSWER: TRUE

Question 27
The basic premises of taxation are the principle of necessity and the duty to support the State.
ANSWER: TRUE

Question 28
In the selection of the objects of taxation, the courts have no power to inquire into wisdom,
objectivity, motive, expediency, or necessity of a tax law.
ANSWER: TRUE

Question 29
The amount imposed in the exercise of police power depends on whether the activity is useful
or not.
ANSWER: TRUE

Question 30
The following items are the basic principles of a sound taxation system, except:
-fiscal adequacy
-theoretical justice
-administrative feasibility
-judicial in character
ANSWER: judicial in character

Question 31
Taxation laws are valid and enforceable even if they do not identify the particular person,
industry or community that is benefited from their application.
ANSWER: TRUE
Question 32
The government extends protection only to individuals who pay their taxes.
ANSWER: FALSE

Question 33
Taxation has retroactive application
ANSWER: FALSE

Question 34
Real property tax is a local tax.
ANSWER: TRUE

Question 35
Taxes collected are based on the willingness of the taxpayer to pay.
ANSWER: FALSE

Question 36
The benefit received theory presupposes that some taxpayers within the territorial jurisdiction
of the Philippines will be exempted from paying tax so long as they do not receive benefits from
the government.
ANSWER: FALSE

Question 37
Collection of taxes in the absence of a law is a violation of the constitutional requirement for
due process.
ANSWER: TRUE

Question 38
The situs or place of taxation is influenced by the following factors, excepts:
-citizenship of the taxpayer
-source of income of the taxpayer
-residence of the taxpayer
-amount of income earned by the taxpayer
ANSWER: source of income of the taxpayer

Question 39
Allowing the Secretary of Finance and the BIR to issue regulations or rulings which go beyond
the scope of tax law violates the principle of nondelegation.
ANSWER: TRUE

Question 40
The agreement among nations to lessen tax burden of their respective subjects is called
international comity.
ANSWER: TRUE

Question 41
Taxation is the strongest among the three inherent powers of the State.
ANSWER: TRUE

Question 42
The aspect of taxation that can be delegated is the administrative aspect.
ANSWER: TRUE

Question 43
The reciprocal duty of support between the government and the people underscores the basis
of taxation.
ANSWER: TRUE

Question 44
The constitutional exemption of religious or charitable institutions refers only to real property
tax.
ANSWER: TRUE

Question 45
Police power regulates both liberty and property.
ANSWER: TRUE

Question 46
Every government unit must exercise the power of taxation, since taxation is very important for
the existence of the State.
ANSWER: FALSE

Question 47
FMV is the value as declared in the Real Property Tax Declaration Form while zonal value is
determined by the Commissioner pursuant to his authority to prescribe real property values.
ANSWER: TRUE

Question 48
Eminent domain may be exercise even by public service corporations and public entities.
ANSWER: TRUE

Question 49
Police power is the most superior power of the government. Its exercise needs to be sanctioned
by the constitution.
ANSWER: FALSE
Question 50
When exemption from a tax imposition is silent or not clearly stated, taxation applies since
exemption are construed against the taxpayer.
ANSWER: TRUE