1. Which theory in taxation states that without taxes, a government would be paralyzed b.

b. No person shall be deprived of property without due process of law

for lack of power to activate and operate it, resulting in its destruction? c. None of the other choices
a. Power to destroy theory 7. Congressman Jack A. Moon of the 2nd district of Zuma de Sur and Senator Mary
b. Symbiotic doctrine Ribook sponsored a bill in the House of Representatives and the Senate, respectively,
c. Lifeblood theory increasing the personal exemptions of individual taxpayers as well as granting tax
d. Sumptuary theory exemption to minimum wage earners. Which of the following is correct?
2. Which of the following constitute objectionable double taxation? a. The house bill should be discussed ahead of the senate bill.
a. A tax imposed both on the occupation of fishing and on fishpond operation. b. The senate and house bills maybe discussed at the same time in houses.
b. Persons engaged in leasing or selling real property are subject to real estate dealers c. The senate bill should be discussed ahead of the house bill.
tax and their sales are also subject to 12% VAT. d. No priority, each bill can discussed ahead of the other.
c. A tax of 1% is imposed for bank reserve deficiency while a penalty of 1/10 of 1% 8. Which is the correct and best statement? A tax reform at any given time underscores
is also imposed as a consequence of such reserve deficiency. the fact that
d. A license fee and a tax imposed on the same business or occupation for selling the a. Taxation is essentially a legislative power.
same articles. b. Taxation is a power that is very broad.
e. Although the power of taxation is basically legislative in character, it is not the c. The estate can and should adopt a progressive taxation.
function of the Congress to d. Taxation is an inherent power of the State.
3. Determine who should be subject to the tax 9. Which of the following statements is not correct?
a. Collect the tax levied under the law a. Construction of private road from taxes is a valid appropriation.
b. Identify who should collect the tax b. Appropriation of taxes for the common good of the people is valid.
c. Fix with certainty the amount of taxes c. Allocation of taxes for the benefit of greater portion of population is considered for
4. Which of the following is false? public purposes.
d. Collections from taxes are public money.
10. A corporation may change its taxable year to calendar year or fiscal year its annual
income tax return, provided
a. It should change its accounting period two years prior to changing its taxable year.
b. It simultaneously seeks BIR approval of its new accounting period.
c. It seeks prior BIR approval of its proposed change in the accounting period.
d. Its constitution and by-laws authorizes the change
11. A tax is invalid, except when
a. A
a. Theory of taxation and its purpose are disregarded.
b. B
b. Inherent and constitutional limitations are not observed.
c. C
c. Basis of taxation is not recognized.
d. D
d. It results to double taxation.
5. The power to tax is the power to destroy. Is this always so?
12. Which of the following is not a scheme of shifting the incidence of taxation?
a. Yes. Tax laws should always be enforced because without taxes the very existence of
a. The tax forms part of the purchase price.
the State is endangered.
b. Changing the terms of the sale like FOB shipping point in the Philippines to FOB
b. Yes. The tax collectors should enforce a tax law even if it results to the destruction of
destination abroad, so that the title passes abroad instead of in the Philippines.
the property rights of a taxpayer.
c. The manufacturer transfer the sales tax to the distributor, then in turn to the
c. No. The executive Branch may decide not to enforce a tax law which it believes to be
wholesaler. in turn to the retailer and finally to the consumer.
confiscatory.
d. The manufacturer transfer the tax to the consumer by adding the tax to the selling
d. No. The Supreme Court may nullify a tax law, hence, property rights are not
price of the goods sold.
affected.
13. The government may not do all except one
e. Some franchise holders who are paying the franchise tax are being required by an
a. Impose tax arbitrarily
amendatory law to pay the value-added tax, while others remain subject to the
b. Tax itself
franchise tax. Which of the following constitutional provisions makes the law
c. Disregard uniformity in taxation
unconstitutional?
d. Delegate its power to tax to private agencies
6. The rule on taxation shall be uniform
14. The Lung Center of the Philippines, a charitable institution. is erected in the middle
a. No law shall be passed impairing the obligation of contracts
of a twelve hectare lot:
 I. A big space at its ground floor is being leased to private parties, for canteen and small 19. One of the following is not a source of our tax laws
store spaces, and to medical or professional practitioners who use the same as their a. 1987 Constitution
private clinics for their patients whom they charge for their professional services. b. Judicial decisions
II. The rest of the portions of the building are used for its patients. whether paying or c. Expert Opinion on Taxation
non-paying. d. Administrative rulings and opinions
III. Almost one-half of the entire area of the lot on the left side of the building is vacant 20. A taxpayer gives the following reasons in refusing to pay a tax. Which of his reasons
and idle. is not acceptable for legally refusing to pay the tax?
IV. A big portion on the right side is being leased for commercial purposes to a private a. That there is lack of territorial jurisdiction.
enterprise known as the Elliptical Orchids & Garden Center b. That he derives no benefit from the tax.
c. That the prescriptive period for the tax has elapsed.
Which portion is subject to real property tax? d. That he has been deprived of due process of law.
21. The legislative body can impose a tax at any amount underscores the legal truism that
a. I, III and IV
taxation is
b. I and II
a. For public purpose
c. I only
b. A very broad power of the state
d. III and IV
c. An inherent power of the tax
15. Tax administration is a system involving enforcement of taxes through the use of
d. Essentially a legislative power
a. tax imposition and collection
22. Which among the following powers of the Commissioner of the Bureau of Internal
b. tax legislation and assessment
Revenue may be delegated?
c. tax assessment and collection
a. Enforcement of all forfeitures, penalties and fines in connection with the
d. tax legislation
collection of national internal revenue taxes.
16. The Bureau of Internal Revenue is under the supervision of the
b. The power to issue rulings of first impression or to reverse, revoke or modify any
a. Department of Budget and Management
existing ruling of the bureau.
b. Department of Labor and Employment
c. The power to assign or reassign internal revenue officers to establishments where the
c. Department of Trade and Industry
articles subject to excise tax are produced or kept.
d. Department of Finance
d. The power to recommend the promulgation of rules and regulations by the Secretary
17. Which of the following facts pertains to tax avoidance?
of Finance.
I. After studying his tax problems, Anjo decided to withdraw his bank deposits and
23. All of the following are administrative functions of taxation, except
to buy tax exempt securities.
a. valuation of property for taxation
II. Bibi who wishes to avoid the payment of taxes assessable on the transaction made
b. equalization of assessment
it appear on the deed of sale that the selling price was only P200,000 although it
c. collection of taxes
was actually P300,000.
d. selection of object of tax
III. Refraining from engaging in activities subject to tax.
24. Which of the following is false?
IV. Debit Insurance Corporation sold its office building to Eca for P200 million who,
a. A law that gives tax privileges to manufacturers in defined industrial areas, which are
in turn, sold the same property to Royal Match, Inc. for P300 million. These two
not enjoyed by other manufacturers elsewhere is not discriminatory and is
transactions were evidenced by Deeds of Absolute Sale notarized on the same day
constitutional.
by the same notary public.
b. None of the other choices
a. A and D
c. A law that imposes a tax or sugar mills and centrals where the revenue collected will
b. A, C and D
be used to improve the sugar industry is a tax for a public purpose, and the law is
c. A only
constitutional.
d. A and C
d. A law that imposes a tax on movie goers in a city where the revenues will be used to
18. Taxation is equitable in all of the following, except
improve flood control infrastructures in the low areas in the city is constitutional.
a. It is based on benefits received.
25. All are similarities of taxation, police power, and power of eminent domain, except
b. None of the other choices
a. All are superior to the non-impairment clause of the Constitution
c. It is based on uniformity rule.
b. All contemplate an equivalent benefit
d. It is based on ability to pay.
c. All exist independently of the Constitution
e. Its burden falls on those better to pay.
d. All are necessary attributes of the Constitution
26. Which of the following is incorrect? a. The ordinance is unconstitutional because Zellie is denied of his right to equal
a. The power of taxation in the Philippine Constitution are grants of and not protection
limitations on taxing powers. b. The contention of Zellie is not justified because of the rule on uniformity is not
b. For the exercise of the power of taxation, the state can tax anything any time. violated considering that the ordinance would also be imposed on all air
c. The state can have the power of taxation even if the Constitution not expressly give it conditioning technician who may come within the jurisdiction of the city.
the power to tax. c. The contention of Zellie is tenable.
d. Taxes may be imposed to raise revenue or to provide disincentives certain activities d. The issue on validity or invalidity of the ordinance should not be set aside.
within the state. 34. Saint Andrew College (SAC) is a non-stock; non-profit educational institution. It
27. Which of the following is true? owns a 5-hectare lot one half of which is being used as its school campus while the
a. Taxation and Eminent Domain may be exercised simultaneously. other half is vacant. To cope with the increasing operating costs and to upgrade its
b. Taxation and Police Power may be exercised simultaneously. faclities, SAC plans to do the following effective January 1, 2020: (1) rent out to a
c. All of our tax laws are statutory laws. marketing firm the vacant portion of the lot; (2) increase tuition fees by 10% in
d. Non-payment of tax makes the business illegal. accordance with government regulations; and (3) import 20 sets of computers for use
28. In case of conflict between the tax code and generally accepted accounting principles in its computer courses. Which of the following questions is answerable by 'Yes.’?
(GAAP) a. Will it be subject to customs duties on the importation of the computers?
a. GAAP shall prevail over tax code b. Is SAC subject to real estate tax on the one-half portion to be rented out to a
b. Both tax codes and GAAP shall be enforced business establishment?
c. The issue shall be resolved by the courts c. Will the increase in tuition fees be subject to income tax if it results to a net income
d. Tax code shall prevail over GAAP from school operations?
29. All are secondary purposes of taxation, except d. Will it be exempt from income tax on its rental to the marketing firm?
a. Uniformity purpose 35. Which of the following statements is correct?
b. Sumptuary purpose a. Non-payment of additional community tax is a ground for imprisonment.
c. Compensatory purpose b. In case of conflict between a tax law and a revenue regulation, the latter shall prevail.
d. Regulatory purpose c. Revenue bills shall originate exclusively from the Senate.
30. Which of the following is not one of the canons of a sound tax system? d. A revenue regulation can expand the provision of law by imposing a penalty even
a. Quantifiability if the law that it implements does not impose a penalty.
b. Equality
c. Convenience
d. Certainty
31. The President of the Philippines and the Prime Minister of Singapore entered into an
executive agreement in respect of a loan facility to the Philippines from Singapore
whereby it stipulated that interest on loans granted by private Singaporean financial
institutions in the Philippines shall not be subject to Philippine income taxes. What
basic characteristic of taxation has been violated by this agreement?
a. legislative nature
b. theoretical justice
c. administrative feasibility
d. inherent limitation
32. In case of tax ambiguity, tax laws shall be interpreted
a. liberally in favor of the government
b. liberally against the government
c. liberally in favor of the taxpayer
d. strictly against the taxpayer
33. The City Council of Del Prieto passed an ordinance imposing an occupation tax on an
air conditioning technician. Zellie is the only person with such occupation in the city.
he challenged the validity of the ordinance as being discriminatory since he is the only
one adversely affected.