INCOME TAXATION 2019 EDITION – TABAG AND GARCIA
CHAPTER 1 – FUNFAMENTAL PRINCIPLES
TRUE OR FALSE (PAGE 42-43)
1. The three fundamental powers of the state may be exercise only by the government. F
2. Taxation is a process or means by which the sovereign, through its law making body raises
income to defray the expenses of the government. T
3. Eminent domain may be exercise eve
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INCOME TAXATION 2019 EDITION – TABAG AND GARCIA
CHAPTER 1 – FUNFAMENTAL PRINCIPLES
TRUE OR FALSE (PAGE 42-43)
1. The three fundamental powers of the state may be exercise only by the government. F
2. Taxation is a process or means by which the sovereign, through its law making body raises
income to defray the expenses of the government. T
3. Eminent domain may be exercise even by public service corporations and public entities. T
4. Police power regulated both liberty and property. T
5. Taxes are raised to cover the cost of governance. T
6. Toll is one of the taxes collected by the government. F
7. License fees are imposed in the exercise of police power. T
8. License fee is imposed to raise revenue. F
9. Tax is generally unlimited because it is based on the needs of the state. T
10. The amount imposed in the exercise of police power depends n whether the activity is useful or
not. T
11. The distinction of a tax from permit or license fee is that a tax is one in which there is generally
no limit on the amount that may be imposed. T
12. Debt, as distinguished from tax, may be paid in kind. T
13. Under the equal protection clause of the constitution, all persons subject to legislation. F
14. Tax laws are civil and penal in nature because there are penalties provided in the case of
violation. F
15. Special assessment is a tax. F
16. Special assessment is imposed on persons, property and property rights. F
17. The Philippine government may subject the land where embassies of foreign governments. F
18. A revenue bill may originate from the senate and on which same bill the House of
representatives. F
19. A person may refuse to pay on the ground that he will not receive a benefit from the tax. F
20. In the exercise of the power of taxation, the state can tax anything at any time. T
21. In cases of deductions and exemptions, doubts shall be resolved literally in favor of the
government. T
22. Levying of local government taxes should be exercise only by the legislative branch of the local
government. T
23. The taxing power of provinces, municipalities and cities precede from a constitutional grant. T
24. Taxation is regressive when their rate goes up. F
25. No law granting any tax exemption shall be passed without the concurrence of 2/3. F
26. There is no constitutional prohibition against double taxation. T
27. “Global system of income taxation” means separate graduated rates are imposed on different
types of income. F
28. One of the schemes of shifting the incidence of tax burden is by transferring the sales tax. T
29. Transformation is a method by which the manufacturer or producer. T
30. In case of ambiguity, tax laws shall be interpreted liberally in favor of the government. F
Multiple Choice. CHAPTER 1
1. Which of the following statements is incorrect? Taxes are the revenues raised in the exercise of
the police power of the state. Page 43
2. The state, having sovereignty can enforce contributions (tax) upon its citizens even without a
specific provision in the constitution authorizing it. Which of the following will justify the
foregoing statement?
INCOME TAXATION 2019 EDITION – TABAG AND GARCIA
3. Statement 1: The distinction of a tax from permit or license fee is that a tax is imposed for
regulation. Page 44
Statement 2: Non-payment of tax does not necessarily render a business legal.
4. The primary purpose of taxation is to raise revenue for the support of the government. However,
taxation is often employed as a devise for regulation by means of which, certain effects or
conditions envisioned by the government may be achieved such as:
5. Which of the following statements is correct? The purpose of taxation may also be
“compensatory” meaning, it may be used to make up for the benefit received.
6. Which theory in taxation states that without taxes, a government would be paralyzed for lack of
power to activate and operate it, resulting in its destruction? Page 45
7. On theoretical basis of taxation, which of the following statements is true? State needs taxation
to exist, while people must support taxation because they need the presence of the state.
8. Incidence of taxation means Payment of tax
9. The actual effort exerted by the government to effect the exaction of what is due from the
taxpayer is known as
10. Statement 1: Symbiotic relation is the reason why the government would impose taxes on the
income of resident citizens derived from sources outside the Philippines.
Statement 2: Jurisdiction is the reason why citizens must provide support to the state so the
latter could continue to give protection.
11. A law was passed by congress which granted tax amnesty to those who have not paid income
taxes for a certain year and at the same time providing for the refund of taxed to those who have
already paid them. The law is
12. Congress passed a new law imposing taxes on income earned out of particular activity that was
not previously taxed. The law, however, taxed incomes already earned within the fiscal year
when the law took effect. Is the law valid? Page 46
13. Due to an uncertainty whether or not a new tax law is applicable to printing companies, ABC
printers submitted a legal query to the BIR on that issue. The BIR issued a ruling that printing
companies are not covered by the new law. Relying on this rulling, ABC Printers did not pay the
said tax. Could the BIR assess ABC Printers for back taxes corresponding to the years before the
new ruling?
14. The constitution requires that all revenue bills shall not originate “exclusively” from the house of
representatives. Assume that in 2014, Congressman Uro proposed an expansion of the coverage
of the value added tax to be known as e-vat law.
Which of the following statements will justify the enacted EVAT law?
I. The constitution simply means that the initiative for filling revenue, tariff or tac bills must come
from the house of representative
15. Assuming senator Bobadilla filled in the senate a substitute e-vat bill “in anticipation” of its
receipt of the bill from the house. Which of the following statements will justify the filling of a
substitute bill by honorable senator Bobadilla? Page47
I. To insist that a revenue statue not only the bill which initiated the legislative process
culminating in the enactment of the law
16. Being legislative in nature, the power to tax may not be delegated, except:
17. Statement 1: The aspects of taxation are shared by the legislative and executive branches of the
government.
Statement 2: Taxes should be prospective and should not be given retroactive effect because
they are burdens. Page 48
18. The power of taxation is basically legislative in character. Which of the following is a legislative
function?
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