Final Module 2 Taxation

ILOCOS SUR POLYTECHNIC STATE COLLEGE
Tagudin Campus
MODULE 2
THE MODULE
TITLE: TAXES, TAX LAWS AND TAX ADMINISTRATION
WHAT IS THE MODULE ALL ABOUT?
Module 2 discusses tax laws, taxes and its distinction with similar items and
the administration of the tax system .
LIST OF TOPICS TO BE STUDIED IN THE MODULE
A. Taxation Law
B. Generally Accepted accounting principles (GAAP) vs Tax Laws
C. Nature of Philippine Tax Laws
D. Definition of Tax
E. Classification of Taxes
F. Distinction of Tax with similar items
G. Tax Law
H. Fundamental Doctrines in taxation
I. Tax Administration
J. Taxpayer Classification for purposes of tax administration
INTENDED LEARNING OUTCOMES (ILO)
At the end of this module, the students are expected to comprehend and
demonstrate knowledge on the following :
1) The type of taxation laws
2) Distinction of tax laws , revenue regualtions and rulings
3) Tax , its elements and classifications
4) Distinction of tax with similar items
5) Tax system and its types
6) The principles of sound tax system
7) How tax is administered
8) The powers of the Bureau of Internal Revenue ( BIR) and the Commissioner
of Internal Revenue( CIR) and its non-delegated powers.
9) The criteria for selection of large taxpayers
LEARNING CONTENT
TAXES, TAX LAWS AND TAX ADMINISTRATION
A. Taxation Law
Course Code: Tax 101

Descriptive Title: Taxation( Income Taxation)
Instructor: Felix M. Del Rosario, CPA
Tagudin Campus
MODULE 2
Taxation Law
Taxation law refers to any law that arises from teh exercise of the
taxation power of the State.
Types of Taxation laws
1. Tax laws – laws that provide for the assessment and the collection of
taxes
Examples :
a. The National Internal Revenue Code(NIRC)
b. The Tariff and Customs Code
c. The Local Tax Code
d. The RealProperty Tax Code
e. The TRAIN law
2. Tax exemption laws- laws that grant immunity from taxation

Examples:
a. The Minimum Wage Law
b. The Omnibus Investment Code of 1987(E.O. 226)
c. Barangay Micro Business Enterprise Law
d. Cooperative Development Act
Sources of Taxation Laws

1. Constitution
2. Statutes and Presidential Decrees
3. Judicial Decisions or case laws
4. Executive Orders and Batas Pambansa
5. Administration Issuances
6. Local ordinances
7. Tax Treaties and conventions with foreign countries
8. Revenue Regulations
Types of Administrative Issuances

1. Revenue Regulations
2. Revenue memorandum orders
3. Revenue memorandum rulings
4. Revenue memorandum circulars
5. Revenue bulletins
6. BIR rulings
B. Generally Accepted Accounting Principles (GAAP) vs. Tax Laws
GAAP are not laws but are mere conventions of finacial reposrting. They are
benchmark for the fair and relevant valuation of recognition income, expense,

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assets, liabilities and equity of reporting entity for general purposes financial
reporting . GAAP accounting reports are intended to meet the common needs
of a vast number of users of the general public.
Tax laws including rules , regulations and rulings prescribe teh criteria for tax
reporting, a special form of financial reporting which is intended to meet
specific needs of tax authorities.
Taxpayers normally follow GAAP inrecording transactions in their books.

However , in the preparation and filling of tax returns , taxpayers are
mandated to follow the tax law in cases of conflict with GAAP.
C. NATURE OF PHILIPPINE TAX LAWS
Philippine tax laws are civil and not political in nature . They are effective even
during periods of enemy occupation. They are laws of teh occupied territory
and not by the occupying enemy. Tax payments made during occupations of
foreign enemies are valid.
Our internal revenue laws are not penal in nature because they do not define
crime. Their penalty provisions are merely intended to secure taxpayers’
compliance .
D. DEFINITION OF TAX
Tax
An enforced proportionate contribution imposed upon persons,properties,
business,rights ,interest,privileges, transactios and acts witin the territorial
jurisdiction of tgr taxing authority exercise by the legislature for public purpose
and generally payable in money.
Elements of a Valid Tax:
1. must not violate tge constitutional, inherent and or contractual limitation of the
power of taxation
2. must be inform and equitable,not unjust, excessive,oppressive,confiscatory or
discriminatory
3. must be for a public purpose
4. must be levied by the taxing power (legislature) having jurisdiction over the
object of taxation
5. must be proportionate in character

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6. generally payable in money, at regular interval (not regular in payment)

E. CLASSIFICATION OF TAXES
A. As to purpose
1. Fiscal -general,fiscal or revenue- tax imposed for the general purpose of the
government or to raise revenue for government needs ex. Income tax
2. Regulatory -special or sumptuary -tax imposed for a special purpose or to achieve
some social or economic ends ex. Tariff or custom duties.
B. As to subject matter
1. Personal,poll or capitalization - tax of a fixed amount imposed on individuals
residing within a specified territory without regard to their property or the occupation
in which they be engaged in ex. Community tax certificate.
2.Property tax-tax imposed on property whether real or personal in proportion either
to its value or in accordance wirh some other reasonable method of
apportionment :Ex. Real estate tax.
3. Exercise tax or privilege tax- tax imposed upon on the performance of an act, tge
enjoyment of a privilege or the engaging in an occupation, ex. Income tax, value -
added tax on business or occupation.
C. As to incidence
1. Direct - the tax is demanded from one person in who is intended to pay it.
Example: income tax and personal tax
2. Indirect- the tax is demanded from one person in the expectation and intention
that he shall indemnify himself at the expense of another by shifting the tax to
another tax payer. Example: Value - added tax , customs duties and some
percentage taxes.
D. As to amount
1. Specific tax- a tax of a fixed amount imposed by the head or number. Example:
tax on distilled spirits cigars and wines (PX/piece)
2. Ad valorem - tax is imposed for a fixed proportion of the amount or value of the
property to which the tax is assessed. Examples: exercise taxes ok cigarettes and
gasoline,real property taxes and certain customs duties (X% of selling price)
E. As to rate
1. Proportional or flat rate - the tax is bases on a fixed percentage of the amount of
the property,income or other basis to be taxed . Ex: real estate tax, VAT and
percentage taxes.

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2. Progressive or graduated tax- the tax rate increases as the tax base increases.
Progressive rate is preferred in achieving vertical equity. Ex: income tax,estate tax
and donor's tax.
3. Regressive tax- the tax reate of which decreses as the tax base increases. The
Philippines has no regressive tax,but sime indirect taxes manifest a regressive
effect.
4. Mixed tax
F. As to imposing authority
1. National tax- imposed by the National Government.
Examples :
a. Income tax d. excise tax
b.estate and donor tax e. other percenatge taxes
c. value-added tax f. documentary stamp tax
2.Local Tax – tax imposed municipal or local government
Examples:
a. real property tax
b. professional tax
c. business taxes, fees and charges
d. community tax;
e. tax on abnks and othe financial institutions
F.DISTINCTIONS OF TAX WITH SIMILAR ITEMS

TAX VS.LICENSE
Tax Revenue
Refers to the amount imposed Refers to the amount collected
Only one of the sources of government The product of taxation. It refers to tall
revenues the funds derived by tge government
whether from tax or from other sources.
TAX VS. LICENSE

Point of distinction Tax License
Purpose For revenue For regulation
Amount No limit Limited
Subject of Imposition Person, properties, Required for the
business rights, commencement of a
interest,privilege,acts and business profession
transportations
Effect of non-compliance Does not necessarily Makes tye business

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make the act, business or illegal

profession illegal
Revocability Has nature of performance Always revocable
Scope The power to tax includes Power to license does nkt
the power to license include tge power to tax
When imposed Post-activity Pre-activity
Basis of Imposition Current data Preceding year or quarter
date. If new business,
based in capitalization
Sources of Power Taxing of the government Police power of the
government
TAX VS. TOLL
Tax Toll
Demand of sovereignty Demand of ownership
One's support for government Compensation for the use of somebody
else's property
Imposed only by the government May be inposed ny the government or
by private individuals
Based on government needs Determine by the cost of the property or
improvement thereon
TAX VS DEBT
Tax Debt
Basis Law Contact
Effect of non-compliance May involved No imprisonment
imprisonment, except for
poll tax
Assignable No Yes
Mode of settlement Generally money Cash or in a kind
Set-off? Generally not subject to Subject to set-off
set-off
Interest Does not earn interest Draws interest when
except when deliquent stipulated or when in
default
TAX VS. SPECIAL ASSESMENT

Tax Special
assessment
Subject of the Imposition Business, interest, Land
transactions,rights,
persons,properties or
privileges
Effect on the person May be made a personal Cannot be made the
owning the subject liability of the person assed personal liability of the

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person assessed,
because it iw the land
that answer for the
liability
Basis of Imposition Necessity with no hope of Entirely on benefits
direct or immediate to the tax recieved
payer
Immediate benefit to the tax
payer
Coverage application Genetal application Exceptional application
TAX VS. TARIFF

Tariff refers to a books of rates containing names of merchandises with
corresponding duties to be paid for the same. Tariff refers to the duties payable on
goods imported or exported. It is a system or principle of imposing duties on the
importation or exportation of goods.
TAX VS. PENALTY
Tax
Purpose To raise revenue To regulate conduct
through punishment and
suppression of injurious
act
Exercising authority To government The government or by
private individuals
Source Law Law or contract
Mode of settlement In money In money or in kind
Note :
• Payment of tax id compulsory to those who are covered by Imposition
• Taxes are important because they are lifeblood of the governmen.
• Taxes are personal. The burden of taxation cannot be transferred from one person
to other by private agreement as this determined by law
• While the power of taxation includes the power to destroy, it is bot absolute. It is the
subject to limitation or restrictions.
G.TAX LAW
Any law that provides for the assessment and collection of taxes for the support of
the government and other public purposes
Sources of Tax Laws:
1. Constitution

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2. Statutes and Presidential Decrees

3. Executive Orders and Batas Pambansa
4. Tax Treaties qnd conventions with foreign countries
5. Administrative Issuanaces or BIR Rulings
6. Judicial Decisions
7. Local Ordinances
8. Revenue Regulation of by the DoF
Revenue Regulation
Formal pronouncements intended to clarify or explain tha tax law and carry inti effect
its general provisions by providing details of administration and procedure. They
have the force and effect of law.
Administrative Issuanaces or BIR Rulings - these are the lesa general interpretations
of the tax laws at teh administrative levels, being issued from time to time by the
CIR, to clarify certain provisions of the tax law. They are merely advisory or sort of
an information service to the tax payer such that, none of them are binding except to
the addressee and may be reversed by the BIR anytime.
NATURE OF PHILIPPINES TAX LAWS
Philippine tax laws are civil and nature and character. They remain effective even
times of war. They are not penal in nature although penalties are provided for their
violation because they do not define crimes and provide for their punishment.
H.FUNDAMENTAL DOCTRINES IN TAXATION

A. Marshall Doctrine -" the power to tax includes the power to destroy"
- constitutional if taxation power is used validly as implement of police power in
discouraging certain acts and enterprises inimical to public wellfare.
- unconditoinal if in raising revenue, taxation is allowed to confiscate or destroy
properties
B. Holmes Doctrine -"TAXATION power is the power to build"
The power to tax should not be the power to destroy. The power to destroy is merely
consequence of taxation.
C. Doctrine of Judicial Non -interference
The Courts cannot inquire inti tge wisdom of taxing act or advisability or expediency
of a tax. The impractability and absurd consequences of a tax law should be
addressed to the legislature and administrative authorities and not the courts.

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D. Prospectivity of Tax Laws- tax laws are prospective in character and application
Exceptions:
1. The retroactive application is necessarily implied from the provisions of the law
2. It involves income tax
3. Tge retroactive application us clearly the intent of the congress
E. Imprescriptibility in taxation -taxes are imprescriptible unless the law itself
provides for such prescription..
F. Principle of Strictissimi Juris"- taxation is the rule and exemption is the exception
Tax exemption must be strictly construed against the tax payer and liberally in favor
of the government.
G. Doctrine of Equitable Recoupment
- where tge refund of taxes are barred by prescription which can no longer be
claimed by a tax payer but there is a present tax being used assessed against the
said tax payer,such present tax may be recouped or set off against the tax, refund of
which has been barred.
- Basis : tye government cannot enrich itself at the expense of a tax payer.
H. Non-compsensation or Set-off
The government and the tax payer are not creditor and debtor to each other. Taxes
are not ninthe nature of contracts between the parties but grew out of a duty arising
from law,hence they cannot ve set off.
I. Doctrine of Estoppel
The state cannot be estopped by the neglect, errors,or mistakes of it's agent or
officers. Thus, tge erroneous application and enforcement of law by public officials
do not block the subsequent correct application of the statues.
I.TAX ADMINISTRATION
The Bureau of Internal Revenue
The Bureau of internal revenue is tasked with the tax administration function of the
government. Together with the Bureau of customs, they are under supervision and
control of the department of finance.
Chief Officials of the Bureau
1. 1 chief officer. The commissioner of internal revenue
2. 4 assistant chief. Deputy commissioners
Power of the Bureau

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1. Assesment and collection of taxes

2. Enforcement of all forfeitures,penalties,and fines and judgement in all cases
decided in it's favor by the courts
3. Giving effects to and administering the supervisory and police powers conferred to
it by the NIRC and or other laws
4. Assignment of internal revenue officers and other employees to other duties.
5. Provisions and distribution ti proper Officials of forms, receipts, certificate's stamps
etc.
6. Issuances of reciepts and clearances
7. Submit annual report,pertinent information to congress and reports to the
congressional oversight committee in matter of taxation.
Powers to the Commissioner of Internal Revenue
1. To interpret the provisions of the NIRC (subject to review by the secretary of
finance)
2. To decide tax cases (subject to exclusive appellate jurisdiction of the court of tax
appeals)
3. To obtain information and to summon, examine and take testimony of persons to
affect tax collection.
4. To make assesment and prescribe additional requirement for a tax administration
and enforcement.
5. To make or amend a return for and in behalf of tax payers or to disregard one filed
by the tax payer.
6. To change a tax period
7. To compromise a tax liabilities of taxpayers
8. To conduct inventory surveillance
9. To prescribe presumptive gross sales or reciepts
10. To prescribe real estate values
The CIR is authorized to divide tge Philippines into zones or Areas and determine
the fair market value of the real properties located in each zones or area.
11. To accredit tax agents
Individual or general professional partnership who have veen denied their
accreditation may appeal to the secretary of finance who shall act on the appeal
within 60 days from the reciept of such appeal. Failure by him to rule on the appeal

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within tge prescribed period shall ve deemed approval of the application flr
accreditation.
12. To inquire into bank deposits under certain cases
13. To prescribe additional procedures or documentary requirements
14. To delegate his powers to any subordinate officer with the rank equivalent to a
division chief of an office
15. To refund or credit internal revenue taxes
16. To abate or cancel tax liabilities in certain cases
17. To examine tax returns and determine tax due thereon;
18. To cause revenue officers and employee's to make a canvass from time to time
of any revenue district ir region concerning taxpayer's
Power to the CIR that cannot be delegated

1. The power to recommend tge promulgation of rules and regulations to the
secretary of finance
2. The power to issue rulings of first impression or to reverse,revoke or modify any
existing rulings of the Bureau.
3. The power to compromise or abate any tax liability
Exception: compromise by regional evaluation boards under the following requisites:
A. Assesment are issued by tge regional offices involving basic deficiency tax of
P500,000, and
B. Involves minor criminal violations as may be determined by rules and regulations
to be promulgated by the secretary of finance,upon recommendations of the CIR,
discovered by regional and district officials.
4. The power to assign and reassign internal revenue officers to establishment
where articles subjects to excise tax are produced or kept. Revenue officer's and
employee's of tge Bureau to special duties shall not exceed 1 year.
Rules in assignment to other duties
Revenue officer's assigned to perform assesment and collection function shall not
remain in the same assignment for more than 3 years. Assignment of internal
revenue officer's and employee's of the Bureau to special duties shall not exceed 1
year.
Agents and Deputies for collection of national internal revenue taxes

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1. The Commissioner of customs and his subordinate with respect to collection of

national internal revenue taxes on imported goods
2. The head of appropriate government offices and his subordinates with respect to
the collection of energy tax.
3. Banks duly accredited by the commissioner with respect to reciepts of payments
of internal revenue taxes authorized to the made thru banks.
J. TAXPAYER CLASSIFICATION FOR PURPOSES OF TAX ADMINISTRATION
For purposes of effective and efficient tax administration , taxpayers are classified
into large and non –large . Large taxpayers are under the supervision of the Large
Taxpayer Service ( LTS) of the BIR. Non- large taxpayers are under the supervision
of the respective Revenue District Offices (RDOs) where the business , trade or
profession of the taxpayer is situated.
The following are the criteria for determining large taxpayers:
a. As to payment
1. Value Added Tax – at least P 200,000 per quarter for the preceding year
2. Excise Tax – at least P 1,000,000 tax paid for the preceding year
3. Income Tax – At least P 1,000,000 annual income tax paid for the
preceding year.
4. Withholding Tax – at least P1,000,000 annual withholding tax payments or
remittances from all types of withholding taxes
5. Percentage Tax- at least P200,000 percentage tax paid or payable per
quarter for the preceding year
6. Documentary stamp tax – at least P1,000,000 aggregate amount per year.
b. As to financial conditions and resulst of operations
1. Gross receipts or sales – P 1,000,000,000 total annual gross sales or
receipts.
2. Net worth – P300,000,000 total networth at the close of each calendar or
fiscal year
3. Gross purchases – P 800,000,000 total annual purchases for the
preceding year
4. Top corporate taxpayer listed and published by the securities and
exchange commission .
Summary of the Module :

Module 1 distinguish tax law from tax exemption law. It enumerates the sources of
tax laws and discuss the nature of Philippine Tax law. It distinguish tax laws, revenue
regulations and rulings . It define also tax and its characteristics known as MRJELPP
which include payable in money , reportorial period , jurisdiction, enforced
contribution, legislative by nature, proportionate in nature and public purpose. It

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present also the classification of taxes and the comparison of tax over revenue,
license, toll, debt , special assessment, tariff and penalty. The module present also
the powers of BIR and its operation regarding Taxation.
References:
 Bangawan, Rex B. (2018). Income Taxation (Laws, Principles and
Applications ) Real Excellence Publishing, Baguio City
 Urbano, Bartolome R, (2015). Income Taxation Made Available, C & E
Publishing , Inc. Manila
INTENDED LEARNING ACTIVITY
ACTIVITY 1
Name: _____________________ Class Schedule: ________________

Course/Year/Section: ____________ Date: _________________________
I. MULTIPLE CHOICE THEORY .Choose the best answer . Place your

answer in a a long coupon bond.
1. In case of doubt of exemption,doubt shall be resolved

A. Stricty against the government
B. Strictly against the courts
C. Liberally in favor of the tax payer
D. Liberally in favor of the government
2. When the provisions of the law is vague as the taxation of the tax object doubt is
resolved
A. Strictly against the government
B. Strictly against the courts
C. Liberally in favor of the government
D. Liberally in favor of the courts
3. Upon taxation depends the government's ability to serve the people for whose
benefit's taxes are collected,hence,taxes may be imposed even in the absence of
constitutional grants and collection grabts and collection of taxes cannot be stopped
A. Necessity theory
B. Benefit recieved theory
C. Ability to pay theory
D. Lifeblood theory
4. Which is not manifestation of thr lifeblood theory

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A. No injunction to enjoin tax collection

B. Equal protection law
C. Imposition of tax even in the absence of constitutional grant.
D. Right to select objects and subjects of taxation
5. The doctrine of Judicial non-interference is anchored on the
A. Marshall Doctrine
B. Holmes Doctrine
C. Complete separation of the state and religion
D. Rigjt to select objects and subjects of taxation
6. Which is general characteristics of tax
A. Based on contract
B. Assignable
C. Payable in money
D. Optional
7. This principle of a sound tax system is violated when the government incurs a
deficit
A. Theoritical Justice
B. Fiscal adequacy
C. Administrative feasibility
D. All of these
8. The e-filing of tad returns and e-payment systems are manifestation of
B. Fiscal adequacy
C. Adminstrative feasibility
D. All of these
9. The progressive system of taxation is consistent which principle of a sound tax
system
B. Fuscal adequacy
Cm administrative feasibility
D. All of these
10. A tax reform at any given time underscores the fact that:
A. Taxation is inherent power of the state
B. Essentially a legislative power
C. Taxation is a very broad power of the state
D. The state can and should adopt progressive taxation
11. Which is not factor that determines the situs of taxation?
A. Classification of the tax
B. Citizenship of the tax payer
C. Residence of the tax payer
D. Government of agencies incharge with the collection
12. Which is not principle bof sounds tax system
A. It should be capable of being effectively enforced
B. Progressive tax should be levied
C. Taxes must be sufficient to mewt government expenditures and public needs
D. It should ve exercise to promote public welfare
13. Which is an incorrect application of situs of taxation
A. Persons are subject to tax at their place of residence

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B. Business are subject to tax where they conduct business

C. Intangible properties are subject to tax where they are physically located
D. Transfer are to subject to tax depending on the residence, citizenship and location
of the property transferred.
14. Double taxation is regarded as highly objectionable. The following except one
can mitigate the impact of double taxation. Choose the exception
A. Tax exemption of the income already subjected to income tax
B. Tax credit for taxpayers who already paid taxes to other tax jurisdiction
C. Reciprocity provisions between tax laws of taxing jurisdiction
D. Tax minimization schemes that would lessen the impact of levy
15. Which statement is incorrect?
A. When there is a close degree of proximity between the tx subject and tacing
jurisdiction taxation can extend beyond the territorial jurisdiction of taxing jurisdiction
B. The reciept of benefit from the existence of the government is conclusively
presumed
C. Most of the benefits from the operation of the government are realized indirectly
D. There should ve direct and proximate benefit recieved from a government before
taxation couldbe exercised
16. Which of the following distinguish tax from license
A. A regulatory measure
B. Imposed in the exercise of the police power
C. Non- payment does not render the business illegal
D. Limited to cover tge cost of regulation
17. Tax distinguish from license
A. Proportional taxato6
B. Progressive taxation
C. Mixed taxation
D. Digressive taxatation
18. Equality in taxatation denotes the use of
A. Proportional taxation
B. Progressive taxatation
C. Mixed taxatation
D. Digressive taxatation
19. The basic community tax of P5.00 per individual is an example of
A. Specific tax
B. Ad valorem tax
C. Special or regulatory tax
D. Revenue tax
20. The additional community tax is an example of
A. Specific tax
B. Ad valorem tax
C. National tax
D. Progressive tax
21. Business taxes is such as percentage tax and value added tax are
A. Specific tax
B. Indirect tax
C. Direct tax
D. Local tax

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22. The state has complete discretion on the amount to be imposed, after
distinguisging the useful and non-useful activity. This statements denotes
A. License
B. Toll
C. Licence fee
D. Custom duty
23. Which statements is incorrect?
A. Special assessment is exceptional operation
B. The amount of toll is dependent upon the value of the property
C. Special assessment is a tax
D. Custom duty is a tax
24. There can be classification of the subject matter being required to shoulder the
burden. Which is the exception?
A. Tax C. Toll
B. License fee D. Eminent domain
25. Which is indirect tax?
A. Community tax C. Income tax
B. Transfer tax D. Business tax
26. All funds derived by the government?
A. Income C. Gains
B. Revenue D. Appropriations
27. Which is not an application of progressive scheme of taxatation?
A. Individual income tax C. State tax
B. Donor's tax with relatives D. Capital gain tax
28. The tax imposed upon the performance of an act, the enjoyment of a privilege or
engaging in profession is known as?
A. Income tax C. Excise tax
B. License D. Transfer tax
29. When the determination of the amount of the tax required an assessment of the
value of the subject, tax this type of tax is known as?
A. Proportional tax
B. Specific tax
C. Ad valorem tax
D. Progressive tax
30. Tax as to graduaton or rate include the following, except?
A. Progressive
B. Proportional
C. Pro-rata
D. Regressive
31. A tax base and a tax rate of an imposition is shown as follows?
Income Tax Rate
P 1,000,000.00 20%
8,00,000.00 30%
6,00,000.00 40%
This taxation scheme makes use a?
A. Progressive rate
B. Proportional rate
C. Digressive rate

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D. Regressive rate
32. Which of the following is a local tax?
A. Value added
B. Documentary stamp tax
C. Other percentage taxes
D. Real property tax
33. I. As a rule, taxes are not assignable
II. Debt earns interest only when stipulated or when there is a legal delay
A. I Is true
B. II Is true
C. I And II Are true
D. I And II are Not true
34. Select the incorrect statement?
A. Tax may be unlimited in amount
B. License makes illegal the business when not paid while taxes do not.
C. Special assessment is not a liability of the person owning the property.
D. Special assessment can be imposed on building and other real right attaching
pertaining to land.
35. I. One of the essential characteristics of tax is it's being unlimited to amount.
II. The State has being complete in discretion on the amount of the license to be
imposed after distinguisging between the useful and non-useful activity.
A. I is true
B. II is true
C. I and II are true
D. I and II are not true
36. Which of the following correct regarding the tax table for the individual taxable
income for residents and citizens?
A. The table shows purely progressive tax rate
B. The tax table is a combination of proportional and progressive tax rate
C. Low income earners are subject to proportional rate while high income earners
are subject to both proportional and progressive tax rate.
D. None of the above
37. Which of the following is not a local tax?
A. Community tax
B. Documentary stamp tax
C. Tax on banks and other financial institution
D. Business taxes,fees and charges
38. A license that imposed for revenue purposes is known as?
A. Licence tax
B. Sin tax
C. Professional tax
D. Mix tax
39. Select the incorrect statement.
A. Tax is demand of sovereignty just as toll is a demand of ownership.
B. No one shall be imprisoned for non payment of debt or poll tax
A. A
B. B
C. A and B are true

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D. Neither A nor B
40. Distinguisging between tax and debt, which is assignable? Which cannot be set-
off
A. Tax, debt
B. Debt, tax
C. Tax, tax
D. Debt, debt
41. Select the correct statement?
A. The doctrine of Estoppel operates against the tax payer not against the
government
B. Non-compsensation or set-off violates the principle of administrative feasibility
C. Taxes are always imprescriptible
D. The principle of Strictissimi juris simply state that exemption is the rule, taxatation
is the exemption
42. Which of the following is the power of commissioner internal revenue
A. Assesment and collection of taxes
B. Enforcement of all forfeitures, penalties and fines
C. Interpretation of the provisions of the NIRC
D. Giving effects to and administering the supervisory and police powers confirred by
the NIRC and other laws.
43. Which of the following power's of the the commissioner of internal revenue
cannot be delagated?
A. The examination of tax return and tax due thereon
B. To refund or credit tax liabilities in certain cases
C. To power to compromise or abate any tax liability involving basic deficiency tax of
P500,000 and minor criminal violations
D. The power to reverse a ruling of first impression
44. Which is incorrect?
A. The tax code shall prevail over generally accepted accounting standards/PFRs
B. Tax treatise can prevail over the tax code
C. Obligation arising from law is not presumed. There should be clear and express
constitutional of grant power, before taxation police power and eminent domain could
be exercise
D. A tax system which is dominantly characterize by indirect taxes is referred to as a
regressive tax
45. A tax system which is not directly practice in the philippines
A. Proportional tax
B. Mixed tax
C. Regressive tax
D. Progressive tax
46. Bases on the provisions of tax code, the constitutional gurantee of progressive
taxatation is applied only to
A. Individual tax payers
B. Corporate tax payers
C. Both individuals and corporate tax payers
D. Citizens of the philippines
47. The following except one are exceptions to the rule that tax exemptions must be
strictly construed

Tagudin Campus
MODULE 2
A. Where the statue granting the exemptions provide for liberal interpretation thereof
B. The tax payer does not fall within the purview of exception by clear legislative
intent
C. Case of special taxes relating to special cases and affecting only special classes
of affection
D. Exemptions refer to public property
48. Which is least principle of sound tax system
A. Consistency with economic objectives
B. Theoritical justice
C. Administrative feasibility
D. Fiscal adequacy
49. Which statement is correct?
A. Tax amnesty is an immunity from all criminal, civil and administrative liabilities
arising from non payment of taxes
B. Tax exemption is an immunity from civil liability only. It is an immunity or privilege,
a freedom from a charge or burden to which others are subjected to.
C. Tax amnesty applies only to past tax periods, hence of retroactive application
while tax exemption has prospective application
D. All of the above
50. Which is not source of tax law
A. Judicial decisions
B. Opinion of tax authors
C. Local ordinances
D. BIR rulings
51. Formal pronouncement intended to clarify or explain the tax law and carry into
effect its general provisions by providing details of administration and procedure.
A. BIR ruling
B. Revenue regulation
C. Opinions of the secretary finance
D. Revenue memorandum circular
52. Which of the following power's of the CIR delagated
A. The power to recommend the promulgation of rules and regulations to the
secretary of finance
B. The power to rulings issue of first impression or to reverse, revoke or modify any
existing rulings of the bureau
C. The power to compromise or abate any tax liability
D. The power to divide the philippines into zones for purposes of enforcement of
national internal revenue taxes.
53. Which agency, office or bureau issues revenue regulations
A. Congress
B. Department office
C. Office of the commissioner internal revenue
D. Revenue district office
54. Which ageny, office or bureau recommends the promulgation of revenue
regulations.
A. Congress
B. Department of finance
C. Office of the commissioner internal revenue

Tagudin Campus
MODULE 2
D. Revenue district office

55. Which of the correct regarding the chief officials of the bureau of internal
revenue.
A. 1 commissioner and 5 deputy commissioners
B. 4 commissioners and 1 deputy commissioner
C. 1 commissioner and 4 deputy commissioners
D. 2 commissioner and 8 deputy commissioners
ACTIVITY 2
Answer the assessment made by your instructor by clicking the link to be

given to you by your instructor. Different link will be given per major .
You may now proceed to the next module of this course. I hope you have
learned some information if not a lot in the
lessons discussed earlier.


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ILOCOS SUR POLYTECHNIC STATE COLLEGE

TITLE: TAXES, TAX LAWS AND TAX ADMINISTRATION

WHAT IS THE MODULE ALL ABOUT?

LIST OF TOPICS TO BE STUDIED IN THE MODULE

INTENDED LEARNING OUTCOMES (ILO)

TAXES, TAX LAWS AND TAX ADMINISTRATION

Course Code: Tax 101

Types of Taxation laws

2. Tax exemption laws- laws that grant immunity from taxation

Sources of Taxation Laws

Types of Administrative Issuances

B. Generally Accepted Accounting Principles (GAAP) vs. Tax Laws

Course Code: Tax 101

Taxpayers normally follow GAAP inrecording transactions in their books.

C. NATURE OF PHILIPPINE TAX LAWS

Course Code: Tax 101

6. generally payable in money, at regular interval (not regular in payment)

Course Code: Tax 101

F.DISTINCTIONS OF TAX WITH SIMILAR ITEMS

TAX VS. LICENSE

Course Code: Tax 101

make the act, business or illegal

TAX VS. SPECIAL ASSESMENT

Course Code: Tax 101

TAX VS. TARIFF

Course Code: Tax 101

2. Statutes and Presidential Decrees

H.FUNDAMENTAL DOCTRINES IN TAXATION

Course Code: Tax 101

Course Code: Tax 101

1. Assesment and collection of taxes

Course Code: Tax 101

Power to the CIR that cannot be delegated

Course Code: Tax 101

1. The Commissioner of customs and his subordinate with respect to collection of

Summary of the Module :

Course Code: Tax 101

INTENDED LEARNING ACTIVITY

Name: _____________________ Class Schedule: ________________

I. MULTIPLE CHOICE THEORY .Choose the best answer . Place your

1. In case of doubt of exemption,doubt shall be resolved

Course Code: Tax 101

A. No injunction to enjoin tax collection

Course Code: Tax 101

B. Business are subject to tax where they conduct business

Course Code: Tax 101

Course Code: Tax 101

Course Code: Tax 101

Course Code: Tax 101

Course Code: Tax 101

D. Revenue district office

Answer the assessment made by your instructor by clicking the link to be

Course Code: Tax 101

You might also like

Name: _____ Class Schedule: