Republic of the

Philippines City of
Tagaytay
City College of
Tagaytay
Akle St.Kaybagal South Tagaytay
City Tel. Nos. (046) 483-0672 /
(046) 483-0470

Group 2

BSBA HRDM 2-7

BTax 1 Activity 2 CHAPTER 1
JAY S. DESINGAÑO

1. What are the bases of exercise of tax power?

The bases of the exercise of tax power can be summarized as follows:

1. Principle of Necessity: This power emanates from the necessity to preserve the
State’s sovereignty. It is the lifeblood of the government and every citizen must pay taxes.
2. Principles of Benefits-Received or Benefits-Protection Theory: Based on the
reciprocal duties, the government collects taxes from the subjects of taxation in order that
it may be able to perform its functions and provide services to them.

The government's right to tax income emanates from its being a silent partner in the
production of income through means of providing protection, proper business climate, and
peace and order to the taxpayers in the making of earnings.

We pay taxes to support the government in order that it may continuously be sustained
with the security and benefits of an organized society.

7. What are the similarities among the three inherent powers of the State?

 They are inherent in sovereignty.

 They are all necessary attributes of sovereignty because there can be no effective
government without them.
 They constitute the three ways by which the state interferes with the private rights and
property.
 They are legislative in nature and character.
 They presuppose an equivalent and compensation
13. Explain the phrase “No public money shall be appropriated for religious purposes”.

ANSWER: EXPLAIN No Public money or prolixity shall ever be appropriated, Applied or used,
directly, for the used, benefits, or support of any sect, church denomination, secretariat
institute, or system of religion, or for the use, benefits or support of any priest, preacher,
minister or other Religions. October12,2009- No public money or property shall be
appropriated, applied paid, or employed directly or indirectly, fir the use benefits. All money
collected on tax levied for a special purpose shall be treated as special fund and paid out for
such purpose only.

Chapter 1 General Principles and Concepts of Taxation Problem 1 - 1

True or False Write True if the statement is correct, or False if the statement is
incorrect.

TRUE 1. The existence of a Constitution is necessary for the exercise of the inherent powers
of the Sovereign State.
TRUE 2. Taxation is the government's legitimate means of interfering with the private
properties of its subjects.
TRUE 3. The benefits from taxation have to be experienced to justify the legitimacy of
collection of taxes from the people.
TRUE 4. Taxation is the primary source of government revenue. Hence, all government funds
come from taxes.
FALSE 5. Sovereign equality dictates that a nation cannot impose taxes on the property of
another country.
TRUE 6. The State can still exercise its taxing powers over its citizen, even if he resides
outside the taxing State's territory.
TRUE 7. AIl government entities regardless of their functions exempted from taxes because it
would be impractical for the government to be taxing itself.
TRUE 8. Revenues derived from taxes cannot be used for the exclusive use of private
persons.
TRUE 9. Local tax ordinances must be uniformly and equally applied throughout the country.
TRUE10. Taxation could be described as a power, as a process, or as a means. As a power,
taxation is a way of apportioning the cost of government among those who are privileged to
enjoy its benefits.
FALSE 11. The State can enforce contributions upon its citizens in the form of taxes even
without a constitutional provision authorizing it.
FALSE12. Appropriation of taxes is considered valid. if intended for the common good of the
people without identifying a particular person to be benefited from it.
TRUE 13. Taxation is inseparable in the existence of a nation.
TRUE 14. Taxation is considered as the lifeblood of the government and every government
unit must exercise this power.
TRUE 15. The amount of taxes may be increased to curve spending power and minimize
inflation.
TRUE 16. The Constitution is the source of the State's taxing power.
INCOME TAXATION Problem 1 - 2

True or False Write True if the statement is correct or False if the statement is
incorrect

FALSE 1. Tax amnesty allows absolute forgiveness to give tax evaders chance to reform with
a clean slate.
TRUE 2. Tax exemption applies only to government entities that exercise proprietary
functions.
TRUE 3. Tax assessment is a process of taxation which involves the passage of tax laws and
ordinances through legislature.
TRUE 4. Taxation, like eminent domain is limited by the Constitutional provision that private
property may not be taken without just compensation.
TRUE 5. The exercise of police power is superior to the non-impairment clause of the
Constitution.
TRUE 6. Taxation, like police power is restricted by the due" process clause of the
Constitution.
FALSE 7. Dumping duty is the additional duty tax imposed on imported goods with lower
prices than their fair market values to protect local industries.
TRUE 8. The doctrine of tax imprescriptibility states that taxes in general are not cancellable.
TRUE 9. The primary requisite of equity principle is that each taxpayer should be required to
contribute equal amounts in the form of taxes.
TRUE 10. Tax assessment refers to the fiscal policy of the government.
TRUE 11. An aspect of tax power that could be delegated to the President covers both
legislative and administrative discretion:
FALSE 12. Eminent domain and police power can effectively be performed even without
taxation.
TRUE 13. When the power to tax is delegated to the local government, only he legislative
branch of the local government can exercise the power.
TRUE 14. All inherent powers presuppose equivalent compensation. _
TRUE 15. There is no imposition of amount in police power.
TRUE16. Police power and eminent domain may defeat the constitutional