Bahir Dar University School of Law

Tax Law Mid-Exam for 4th year Regular Students

Department: Law Time Allowed: 90 minutes

Course Title: __Tax Law_________ Course Code: _ Coverage 25%

General Instructions

 This exam paper contains two question types, Multiple Choice and essay types.

 Examinees are required to write their ID numbers and Names

Multiple Choice; 10 Points ( 2 Points each)

1. Which of the following is a correct statement?
A. Proportional tax is based on the principle 'higher the income, higher the tax'.
B. A tax is said to be regressive when its burden falls more heavily on low-income earners.
C. Income tax is a form of tax which is levied on individual's total earnings.
D. All
2. Which of the following may not be the objective of taxation?
A. Raising revenue for the state
B.To maintain economic stability
C. To reduce disparities in the distribution of income
D. Punishing offenders
E. None of the above
3. The following is a characteristic of indirect tax -

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2011 (EC) 1st Sem. Final Exam. Course code: ________
A. The impact and incidence are not on the same person.
B. It is levied on income.
C. Taxes are progressive in nature.
D. All of the above
4. Which of the following is true?
A. Advance rulings, after provided by the tax authority, are binding on the taxpayer
B. The Ethiopian income tax law has fully embraced the Haig Simons definition of income in its
content.
C. The principle of legality gives an exclusive tax law making power to the legislature leaving no
room for delegation.
D. All of the above
N. None of the above
5. Which of the following is a correct statement?
A. Under FDRE Constitution, taxing power over bodies is given concurrently for the federal
government and regional states.
B. Fringe benefits are not being taxed due to the absence of valuation rules under the law
C. Under the Ethiopian income tax law, the various incomes of a person are aggregated together
before they are taxed
D. None
Essay Part; 15 marks:-
1. Tax doesn’t have a clear cut definition but it has some elements that differentiate it from
other types of revenues. List and explain these elements of tax. 5 points
2. Among the principles of a good tax system, Adam Smith’s four cannons of taxation are
the widely known and applied principles all over the world. List and explain these four
cannons of taxation and how they are important.5 points
3. One of the theories of taxation is the sacrifice theory. However, sacrifice theory is not so
consensual that various scholars have suggested the varieties of this theory. List and
explain at least three forms of sacrifice theory, how they differ one another and pick your
own best form of sacrifice with justification. 5 Points

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2011 (EC) 1st Sem. Final Exam. Course code: ________