CORDILLERA CAREER DEVELOPMENT COLLEGE

TAXATION LAW I

ACADEMIC YEAR 2023-2024

MIDTERM QUIZ

I. INSTRUCTIONS. Read each question very carefully and write your

answers on your answer sheet in the same order the questions are
posed. Answer the Essay questions clearly, and concisely.

I.

The two methods of avoiding indirect double taxation are the exemption
method and the credit method. The income or capital which is taxable in the
state of source or situs is exempted in the state of residence in the
exemption method. In the credit method, the tax paid in the former is
credited against the tax levied in the latter.

II.

No. The contention of such weight as to constitute grave abuse of discretion

which may invalidate the law is not correct.

The case at bar is not a delegation of legislative power. It is simply a

delegation of ascertainment of facts upon which enforcement and
administration of the increase rate under the law is contingent.

III.

No. Giving of a financial reward is not constitutional and may constitute

violation of the statute because of the unwarranted collection of fees. What
may be granted is the non-monetary rewards given to the tax collectors.

IV

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The objections should not be given credence. It is legal to set up duly
authorized duty-free shops in the SSEZ to sell tax and duty-free consumer
items in the Secured Area. This is in line with the policy enunciated in the
law that “ the Subic Special Economic Zone shall be developed into a self-
sustaining, industrial, commercial, financial and investment center to
generate employment opportunities in and around the zone and to attract
and promote productive foreign investments.

Furthermore, the law is very clear that the “ exportation or removal of goods
from the territory of the Subic Special Economic Zone to other parts of the
Philippine territory shall be subject to customs duties and taxes under the
Customs and Tariff Code and other relevant tax laws of the Philippines.”

The answer would not be the same. This time the Presidential Proclamation
would be invalid as the statutory tax exempt privilege was so granted only to
the Subic Special Economic Zone and not to John Hay or Clark. This is so
because the Constitution mandates that no law granting tax exemption shall
be passed without the concurrence of a majority of all the members of
Congress.

VI

The requisites of challenging the constitutionality of the law are as follows:

1)the tax should be for a public purpose (2) rule of taxation should be
uniform (3) the person or property taxed is within the jurisdiction of
the taxing authority (4) assessment and collection is in consonance
with the due process clause (5) The tax must not infringe on the
inherent and constitutional limitations of the power of taxation

VII
No. The imposition is not a tax measure but a regulatory provision for the
collection of fees imposed. It is imposed in the exercise of the police power of
the state. It is for the purpose of raising revenues and not for tax measure
purposes.

VIII

The effect of a BIR reversal of a previous ruling in interpreting a law as

exempting a tax payer would place the latter in prejudice. BIR is prohibited
in reversing a previous ruling because it would be violative of the principle
of non-retroactivity of rulings.

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 IX

Tax exemptions are strictly construed against the taxpayer and liberally in
favor of the state because taxes are the lifeblood of the government.Without
revenue raised from taxation, the government will not survive, resulting in
detriment to society. Without taxes, the government would be paralyzed for
lack of motive power to activate and operate it.

Tax laws must be construed strictly against the government and in favor of
the taxpayer for the reason that taxes are burdens on the taxpayer, and
should not be unduly imposed or presumed beyond what the statutes
expressly and clearly import.

II. CHOOSE THE BEST ANSWER. Write the letter that corresponds to
your answer in your answer sheet.

1. B
2. B
3. D
4. A
5. C
6. B
7. A
8. A
9. B
10. B
11. B
12. D.
13. C.
14. D
15. D
16. A
17. E
18. C
19. D
20. C
21. E
22. B

23. C
24. B
25. A

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26. C
27. D
28. D
29. A
30. B
31. C
32. A
33. A
34. D
35. A
36. E
37. A
38. B
39. D
40. B

******** nothing follows! ********

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