TAXATION REVIEW Activity No.

1. The City of Manila, claiming that it can impose taxes under the Local Government Code, imposed a tax on banks
(in addition to percentage tax on banks imposed in the National Internal Revenue Code).

The banks within the City of Manila objected for the various reasons given below. Which would justify the
objection of the banks?

A. Uniformity in taxation
B. The rule of double taxation
C. The power of taxation cannot be delegated
D. None of these

2. Some franchise holders who are paying the franchise tax are being required by an amendatory law to pay the
value-added tax, while others remain subject to franchise tax. Which of the following provisions makes the law
unconstitutional?
A. No law shall be passed impairing the obligations of contract
B. The rule of taxation shall be uniform
C. No person shall be deprived of property without due process of law
D. None of the above

3. A taxpayer who had gross receipts derived from business in the preceding year did not declare it when he paid
the poll tax. He paid only the basic and tax and did not pay the additional community based on gross receipts.
Will he be imprisoned?
A. No. No person shall be imprisoned for non-payment of poll tax
B. Yes. This is a case of tax evasion. Tax evasion is a criminal offense
C. No. Paying the basic poll tax is enough. The additional poll tax is discretionary
D. Yes. Non- payment of poll tax is punishable by imprisonment

4. All forms of tax exemption can be revoked except tax exemption based on
I. Constitution
II. Contract
III. Law
A. I only
B. II only
C. I and II only
D. I, II and III

5. License fee levied on the sale of bibles and other religious literature is violative of
A. Non-infringement of religious freedom
B. No appropriation for religious purposes
C. Exemption of religious, charitable or educational entities, non-profit cemeteries and churches from property
taxation.
D. Exemption of revenues and assets of non-stock, non-profit educational institution and donation for educational
purpose from taxes and duties.

6. The test of exemption of real properties owned by religious or charitable from real property taxes is
A. Usage
B. Ownership
C. Location
D. Either ownership or location

7. The Constitutional guarantee of progressive taxation is applicable only to

A. Individual taxpayers
B. Corporate taxpayers
C. Both individuals and corporate taxpayers
D. Citizens of the Philippines

8. A person made several misrepresentations in securing a loan despite his clear inability to repay the same. When
he defaulted, the creditor filed for legal action. Can he be imprisoned?
A. No. Non-payment of debt would not lead to imprisonment
B. Yes. This is estafa, a criminal offense subject to imprisonment
C. No. Non-payment of debt is a civil, rather than a criminal case
D. Yes. One can be imprisoned for non-payment of tax

9. Which of the following tax privileges can be withdrawn?

 A. Income tax exemption of non-profit educational institution
B. Real property tax exemption of religious, charitable and educational entities
C. Taxpayer’s right to due process and equal protection
D. Tax exemption granted by law

10. Which of the following is not legally tenable in refusing to pay a tax imposition?
A. Violation of taxpayer’s right of due process of law
B. The taxing authority has no tax jurisdiction
C. The prescriptive period of assessment has elapsed
D. That there is no benefit that can be derived from the tax

11. A law was passed by Congress which granted tax amnesty to those who have not paid income tax for a certain
year without at the same time providing for the refund of taxes to those who have already paid them. The law is:
A. Valid because there is a valid classification
B. Not valid because those who did not pay their taxes are favored over those who have paid their taxes
C. Valid because it was Congress who passed the law and it did not improperly delegate the power to tax
D. Not valid because only the President with the approval of Congress may grant amnesty

12. Which is an incorrect application of situs of taxation?

A. Persons are subject to tax at their place of residence
B. Businesses are subject to tax where they conduct business
C. Intangible properties are subject to tax where they are physically located
D. Transfers are subject to tax depending on the residence, citizenship and location of the property transferred

13. 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

14. Which is not a factor that determines the situs of taxation?

A. Classification of the tax
B. Citizenship of the taxpayer
C. Residence of the taxpayer
D. Government agencies in charged with the collection

15. Who is not subject to Philippine personal tax?

A. Resident alien
B. Resident citizen
C. Non-resident citizen
D. None of these

16. A resident citizen had the following business sales during the month:
Domestic sales P 2,000,000
Sales of branch in Singapore 1,500,000
Total Sales 3,500,000
What is the amount subject to Philippine business tax?
A. P3,500,000
B. P2,000,000
C. P1,500,000
D. P0

17. A resident citizen had the following properties:

Philippine properties P 2,000,000
Properties in Hongkong 1,500,000
Total sales 3,500,000
What is the amount subject to Philippine property tax?
A. P3,500,000
B. P2,000,000
C. P1,500,000
D. P0

18. Mr. Kang, an Indonesian national, sold to his OFW friend in Indonesia his car which they agreed to be
delivered to the Philippines within 30 days after import documentation are completed. Mr. Kang realized a
P300,000 income on the sale. Which is correct?
A. The gain is subject to Philippine income tax since the goods are delivered in the Philippines
 B. The gain is not subject to Philippine income tax since the income is earned outside the Philippines
C. The gain is subject to Philippine income tax since the sale is made to a Filipino
D. The gain is not subject to income tax since the seller is an alien who is not subject to Philippine tax

19. 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 jurisdictions
C. Reciprocity provisions between tax laws of taxing jurisdictions
D. Tax minimization schemes that would lessen the impact of levy

20. A seller sold a piece of land to a buyer who agreed to pay P4,000,000. The sale is subject to a capital gains tax
based on the selling price. In order of the seller to reduce his taxes, they executed a deed of sale which indicated a
selling price of P1,000,000.
This is an example of
A. Tax minimization
B. Tax evasion
C. Tax loophole
D. Tax arbitrage

21. Aldo has a property worth P1,000,000 which he intends to transfer to his son. Considering that disposal by sale
would be subject to capital gains of 6%, Aldo decided to donate the property in four parts of P250,000 over four
years.
This is an example of
A. The minimization
B. Tax evasion
C. Tax loophole
D. Tax arbitrage

22. Claiming input VAT on personal transactions as credit against output VAT on sales in the course of business is
an example of
A. Tax minimization
B. Tax evasion
C. Tax loophole
D. Tax arbitrage

23. A taxpayer had a family home worth P15M which he intends to transfer to his only son.
Which of the following mode of transfer results in optimum tax minimization?
A. Transfer mortis causa
B. Transfer inter-vivos
C. Sale transaction
D. Sale for insufficient consideration

24. Which of the following forms of escapes will more likely to result in loss of revenue to the government?
A. Shifting
B. Capitalization
C. transformation
D. tax exemption

25. Tax minimization cannot be achieved by

A. Tax planning
B. Selection of transaction
C. Maximization of tax credits and loss carry-overs
D. Offsetting of losses and income of subsidiaries

26. Which of the following tax saving practices could result in a BIR assessment?
A. Practicing tax avoidance
B. Maximizing tax incentives
C. Engaging in tax dodging schemes
D. Entering into compromise with the government

27. When exemption from a tax imposition is silent or not clearly stated, which statement is true?
A. Taxation applies since exemptions are construed against the government
B. Exemption still applies since this is exemption by omission
C. Taxation applies since exemptions are to be construed against the taxpayer
 D. Exemption applies since obligation arising from law cannot be presumed and hence construed against the
government

28. Select the incorrect statement regarding tax amnesty and condonation
A. In tax amnesty, violators are required to pay a portion of the tax assessed
B. When the remaining unpaid portion of the tax is condoned, the taxpayer cannot ask for refund for the balance
already paid
C. Tax amnesty operates as a general pardon and is only frequently available
D. Tax condonation operates on the whole tax due of the assessed tax and not only to the unpaid portion

29. When the provisions of tax laws are silent as to the taxability of an item, which is true?
A. Taxation applies since taxation is the rule, exemption is the exception.
B. Exemption applies since vague tax laws are construed against the government
C. Taxation applies in accordance with the Lifeblood doctrine.
D. Exemption applies since obligation arising from law is presumed; ignorance of the law is not an excuse

30. Which statement is incorrect?

A. Tax assessment are presumed to be correct and done in good faith.
B. Tax laws should operate retrospectively
C. Refund of taxes should earn interest since as a principle, no one shall be enriched at the expense of another; the
state should be the model of good faith among its constituents.
A. A, B and C
B. A and B
C. A only
D. B and C

31. I. Forward shifting will result in increased prices.

II. Tax evasion is also known as tax dodging.
A. I is correct
B. II is correct
C. I and II is correct
D. I and II is not correct

32. When tax is recovered by the manufacturer or producer by finding out means of improvement in production so
as savings would compensate for taxes, this is known as?
A. capitalization
B. onward shifting
C. backward shifting
D. transformation

33. Which of the following cases constitute an objectionable double taxation?

A. A license fee and tax imposed on the business or occupation for selling the same articles.
B. A tax imposed both on the occupation of fishing and fishpond operation.
C. A person engaged in leasing or selling real property are subject to income tax on their income and their sales
are also subject to 12% VAT.
D. A tax o 1% is imposed for bank reserve deficiency while penalty of ½ of 1 % a day is also imposed as
consequence of such reserve deficiency.

34. This is analogous to abatement

A. Amnesty
B. Condonation
C. Compromise
D. Incentive

35. Which statement is correct?

A. Tax amnesty is an immunity from all criminal, civil and administrative liabilities arising from nonpayment 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 or retroactive application, while tax exemption has
prospective application
D. None of the above

36. What is taxation?

A. A n optional contribution from the people to raise revenue
B. An inherent power of the State exercised by the judiciary
 C. A compulsory contribution from the people to raise revenue
D. A discretionary power of the State exercised by the executive

37. What is the primary source of the power of taxation?

A. Constitution
B. Executive Branch
C. Judiciary
D. Local Government Units

38. Who exercises the inherent power of the State to impose taxes?
A. Judiciary
B. Executive
C. Legislature
D. Local Government Units

39. Can taxes be imposed even without a constitutional provision?

A. Yes, taxes can be imposed even in the absence of a constitutional provision
B. No, taxes can only be imposed if there is a constitutional provision authorizing their imposition
C. I t depends on the type of tax being imposed
D. It depends on the discretion of the President of the Philippines

40. What is the primary purpose of the government’s authority to impose taxes?
A. To limit economic growth and regulate the economy
B. To provide revenue for essential services and promote economic growth
C. To limit the power of the government
D. To provide a source of income for private individuals

41. What is the reason why no court in the Philippines can issue an injunction to retrain the collection of any
national internal revenue tax, fee, or charge?
A. To protect in the interests of the taxpayers
B. To limit the power of the government to collect taxes
C. To ensure that the government can collect taxes in a timely manner
D. To encourage taxpayers to pay their taxes voluntarily

42. It is possible to obtain an injunction to stop the collection of taxes in the Philippines?
A. Yes, taxpayers can obtain an injunction to stop the collection of taxes at any time
B. No, taxpayers cannot obtain an injunction to stop the collection of taxes under any circumstances
C. It depends on the type of the tax being owed
D. It depends on whether there is pending case filed in the CTA to enjoin the collection of tax

43. Can a tax payer in the Philippines offset the amount of taxes they owe against a debt that the government owes
them?
A. Yes, taxes are subject to set-off in the Philippines
B. No, taxes are not subject to set-off in the Philippines, except in the certain circumstances
C. It depends on the type of tax being owed
D. It depends on the discretion of the President of the Philippines

44. Which of the following is an exception to the general rule that the power to tax is essentially a legislative
function and cannot function and cannot be delegated to other branches of government?
A. The power to tax can be delegated to any branch of government
B. The power to tax can be delegated to local governments in respect to matters of national concern
C. The power to tax can be delegated to the judiciary in certain circumstances
D. The power to tax can be permissively delegated to certain branches of government

45. What is the purpose of taxation with it is used to regulate a particular industry?
A. To generate revenue for the government
B. To redistribute wealth among taxpayers
C. To curtail or improve a particular industry
D. To provide representation to taxpayers

46. What is the purpose of taxation when it is used as an implement of the police power for the purpose of
promoting general welfare?
A. To generate revenue for the government
B. To redistribute wealth among taxpayers
C. To curtail or improve a particular industry
D. To promote the general welfare of society
47. When can the power to tax be used to destroy, according to the Marshall Dictum?
A. Whenever the government wants to destroy a particular industry or business
B. Only when the power to tax used as an implement of police power
C. Whenever the government needs to raise revenue
D. Only when the power to tax is used in violation of inherent and constitutional limitations

48. What is the purpose of a progressive tax system based on one’s ability to pay?
A. To generate revenue for the government
B. To redistribute wealth among taxpayers
C. To curtail or improve a particular industry
D. To reduce social inequalities

49. What is the purpose of providing tax exemptions and incentives to entice investments?
A. To generate revenue for the government
B. To redistribute wealth among taxpayers
C. To curtail or improve a particular industry
D. To encourage economic growth

50. Are the requirements for a valid tax applicable to other forms of exactions?
A. Yes, the requirements for a valid tax are applicable to all forms of exactions
B. No, the requirements for a valid tax are only applicable to taxes, not to other forms of exactions
C. It depends on the specific form of exaction in question
D. It depends on whether the exaction is imposed by the government or by a private entity

51. What is license?

A. A tax imposed on individuals or businesses for engaging in a particular activity
B. A fee paid to the government for the use of a particular resource or service
C. A special privilege or authority granted by the government to engage in a particular activity
D. A penalty imposed on individuals or businesses for violating tax laws or regulations

52. What is the effect of a license granted by the State?

A. It imposes a tax on individuals or businesses for engaging in a particular activity
B. It requires individuals or businesses to pay a fee for the use of a particular resource or service
C. It makes lawful an act that would otherwise be unlawful
D. It imposes a penalty on individuals or businesses for violating tax laws or regulations

53. What is the basis for regulating certain occupations or activities through licensing?
A. The need to generate revenue for the government
B. The need to promote competition among businesses
C. The need to protect and promote the public interest in health, morals, development, and safety
D. The need to punish individuals or businesses for violating laws or regulations

54. What is the basis for determining the fees or charges for licensing?
A. The need to generate revenue for the government
B. The need to promote competition among businesses
C. The need to protect and to promote the public interest in health, morals, development, and safety
D. The need to bear a reasonable relation to the probable expenses of regulation

55. What is toll?

A. A tax imposed on individuals or businesses for engaging in a particular activity
B. A fee paid to the government for the use of a particular resource or service
C. A special privilege or authority granted by the government to engage in a particular activity
D. A sum of money paid for the use of a road, bridge, or other public facility

56. What is special assessment?

A. A tax imposed on individuals or businesses for engaging in a particular activity
B. A fee paid to the government for the use of a particular resource or service
C. A charge imposed on lands especially benefited by the public works or improvements financed by the
government
D. An amount collected by the BIR in lieu of criminal prosecution for violations committed by taxpayers

57. Who is liable for a special assessment?

A. The person assessed
B. The government agency that imposed the assessment
 C. The property owner is liable only for the land involved in the public works or improvements financed by the
government
D. The property owner is not liable for any cost associated with the public works or improvements financed by
the government

58. What is the extent of the liability of the property owner for a special assessment?
A. The property owner is liable for the full cost of the public works or improvements financed by the government.
B. The property owner is liable for the cost of the public works or improvements financed by the government, plus
interest and penalties.
C. The property owner is liable only for the land involved in the public works or improvements financed by the
government.
D. The property owner is not liable for any cost associated with the public works or improvements finance by the
government.

59. what is the basis for a special assessment?

A. The need to generate revenue for the government
B. The need to promote competition among businesses
C. The need to protect and promote the public interest in health, morals, development, and safety
D. The benefits received by the property owner from public works or improvements financed by the government

60. Why cannot taxes and debts be the subject of compensation?

A. Because the government and the taxpayer are mutually creditors and debtors or each other
B. Because a claim for taxes is a debt, contract, or judgment allowed to be set off
C. Because taxes and debts are not related to each other and cannot be offset against each other
D. Because a claim for taxes is not a debt, contract, or judgement allowed to be set off, and the government and
the taxpayer are not mutually creditors and debtors of each other

61. What is the importance of taxes to the government?

A. taxes is not important to the government
B. Taxes are important to the government, but their availability is not a concern
C. Taxes are important to the government, and their prompt and certain availability is an imperious need
D. Taxes are important to the government, but their availability is only a concern for certain types of taxes

62. what is the consequence of the absence of taxes for the government?
A. The absence of taxes would not affect the government
B. The absence of taxes would affect government, but it would find alternative sources of revenue
C. The absence of taxes would paralyze the government for lack of motive power to active and operate it
D. The absence of taxes would lead to an increase in government efficiency

63. What is the importance of collecting taxes in accordance with the law?
A. Collecting taxes in accordance with the law is not important
B. Collecting taxes in accordance with the law is important, but it is not necessary for government operations
C. Collecting taxes in accordance with the law is important, as any arbitrariness will negate the very reason for
government itself
D. Collecting taxes in accordance with the law is important, but necessary for certain types of taxes

64. What branch or department has the primary responsibility to interpret tax laws and regulations?
A. The Bureau of Internal Revenue (BIR)
B. The Department of Finance (DOF)
C. The Supreme Court
D. The Congress of the Philippines

65. What is the Necessity Theory in the context of government?

A. The theory that government is not necessary for society to function
B. The theory that government is only necessary for certain types of societies
C. The theory that the existence of a government is a necessity for society to function
D. The theory that the existence of a government is unnecessary for economic growth

66. What is the importance of a sovereign state’s ability to pay its expenses?
A. A sovereign state’s ability to pay it’s not important
B. A sovereign state’s ability to pay its expenses is important, but it does not have the right to compel citizens and
property to contribute
C. A sovereign state’s ability to pay its expenses is important, and it has the right to compel all citizens and
property within its limit to contribute
D. A sovereign state’s ability to pay its expenses is important, but it only has the right to compel certain citizens
and property to contribute
67. What is the Benefits-Received Theory?
A. The theory that taxation is not necessary for the society to function
B. The theory that taxation is based on the ability to pay
C. The theory that taxation is based on the reciprocal duties of protection and support between the State and its
inhabitants
D. The theory that taxation is based on the government’s need for revenue

68. What is the scope of taxation in the context of government revenue?

A. The scope of taxation is limited to certain types of taxes
B. The scope of taxation is limited to certain sectors of the economy
C. The scope of taxation is comprehensive, covering all sources of government revenue
D. The scope of taxation is limited to certain income levels

69. What is the extent f the power of taxation?

A. The power of taxation is limited to certain types of taxes
B. The power of taxation is limited to certain sectors of the economy
C. The power of taxation is unlimited in force and extent, subject only to the discretion of the authority that
exercises it
D. The power of taxation is limited to certain income levels

70. What is the extent of the power of the legislative body to impose taxes?
A. The power of the legislative body to impose taxes is limited to certain types of taxes
B. The power of the legislative body to impose taxes is limited to certain sectors of the economy
C. The power of the legislative body to impose taxes is plenary, meaning they have the power to impose taxes as
they may deem expedient
D. The power of the legislative body to impose taxes is limited to certain income levels

71. What is the important factor that determines the source of income of personal services?
A. The residence of the taxpayer
B. The place where the contract for service is entered into
C. The place of payment
D. The place where the services were actually rendered

72. What does source of income refer to with respect to the rendition of labor or personal service?
A. The residence of taxpayer
B. The place where the contract for service in entered into
C. The place of payment
D. The property, activity, or service that produced the income

73. What determines the source of income refer to with respect to the rendition of labor or personal service?
A. The residence of taxpayer
B. The place where the contract for service is entered into
C. The place of payment
D. The place where the labor or service was performed

74. What are the principles of a sound tax system?

A. Fiscal inadequacy, theoretical injustice, administrative infeasibility, and economic inefficiency
B. Fiscal inadequacy, theoretical justice or equity, administrative feasibility, and economic efficiency/elasticity
C. Fiscal surplus, theoretical inequality, administrative complexity, and economic rigidity
D. Fiscal inefficiency, theoretical bias, administrative impracticality, and economic instability

75.What is theoretical justice or equity?

A. All taxpayers should pay the same amount of taxes regardless of their income or wealth
B. Taxpayers with higher income or wealth should pay less taxes than those with lower income or wealth
C. Similarly situated taxpayers should pay equal taxes, while those who have more should pay more
D. Taxpayers should be taxed based on their gender, race, or religion

76. What is fiscal adequacy?

A. Revenues generated should be less than the demands of public expenditure
B. Revenues generated should be equal to the demands of public expenditure
C. Revenues generated should be more than the demands of public expenditure
D. Revenues generated should be irrelevant to the demands of public expenditure

77. What is administrative feasibility?

A. The tax system should be difficult to implement in order to discourage tax evasion
 B. The tax system should be easy to implement in order to encourage tax compliance
C. The tax system should be based on arbitrary rules and regulations
D. The tax system should be biased towards certain taxpayers

78. What is economic efficiency / elasticity?

A. The cost of collecting taxes should be higher than the benefits derived from it
B. The cost of collecting taxes should be equal to the benefits derived from it
C. The cost of collecting taxes should be lower than the benefits derived from it
D. The cost of collecting taxes is irrelevant to the benefits derived from it

79. What are the inherent limitations on taxation?

A. Private purpose, exemption from taxation of government entities, delegation of the legislative power to tax,
international comity, situs
B. Public purpose, exemption from taxation of government entities, delegation of the legislative power to tax,
international comity, situs
C. Public purpose, inclusion of government entities in taxation, delegation of the legislative power to tax,
international comity, situs
D. Public purpose, exemption from taxation of government entities, non-delegation of the legislative power to tax,
international comity, situs

80. What does the public purpose mean?

A. Taxes should be levied for private gain or benefit
B. Taxes should be levied for the general welfare and benefit of the public
C. Taxes should be levied for the benefit of a specific group or individual
D. Taxes should not be levied at all

81. Which of the following is an example of public purpose?

A. Using tax revenues to fund a private business venture
B. Using tax revenues to fund a political campaign
C. Using tax revenues to build a public hospital
D. Using tax revenues to purchase luxury vehicles for government officials

82. What does exemption from taxation of government entities mean?

A. The government can tax itself and its instrumentalities without any restrictions
B. The government cannot tax itself or its instrumentalities unless otherwise provided by the law
C. The government can tax itself and its instrumentalities, but at a lower rate than other taxpayers
D. The government can tax itself and its instrumentalities, but only private gain or benefit

83. Which of the following scenarios would be a violation of the non-delegation of the legislative power to tax?
A. The Bureau of Internal Revenue (BIR) issuing implementing rules and regulations to enforce a tax law passed
by Congress
B. The Department of Finance (DOF) proposing a tax reform bill to Congress for consideration and approval
C. The President issuing an executive order imposing a new tax on a specific industry
D. The Supreme Court declaring a tax law unconditional and striking it down

84. What does revenue refer to in taxation?

A. All funds income derived by the government from tax only
B. All funds or income derived by the government from whatever source and whatever manner
C. All funds or income derived by the government from fees and charges only
D. All funds or income derived by the government from penalties and fines only

85. What is a subsidy?

A. A tax imposed on individuals or businesses for engaging in a particular activity
B. A fee paid to the government for the use of a particular resource or service
C. A sum of money granted by the government to assist an industry or business so that the price of a commodity
or service may remain low or competitive
D. A n amount collected by the BIR in the lieu of criminal prosecution for violations committed by taxpayers

86. Which of the following is an example of the application of the principle of international comity?
A. A Philippine company claiming a tax credit for foreign taxes paid on income earned in a foreign country
B. The Bureau of International Revenue (BIR) imposing taxes on a foreign company that has no presence in the
Philippines
C. The Philippines imposing higher taxes on imports from a specific country to protect domestic industries
D. The Philippine government refusing to cooperate with other countries in the exchange of tax information

87. Which of the following statements is true regarding the origin of revenue bills in the Philippines?
 A. Revenue bills can originate from either the House of Representatives or the Senate.
B. Revenue bills must originate exclusively in the Senate.
C. Revenue bills must originate exclusively in the House of Representatives.
d. Revenue bills can originate from any branch or agency of government.

88. What is the requirement for the passage of a law granting tax exemption in the Philippines?
A. Approval by a simple majority of all the members of Congress
B. Approval by a two-thirds vote of all members of Congress
C. Approval by a majority of those present and voting in both houses of Congress
D. Approval by a majority of all members of all the members of Congress

89. What is the meaning of the progressive system of taxation in the Philippines?
A. Taxes must be imposed at the same rate for all taxpayers regardless of their income level
B. Tax must be imposed based on the taxpayer’s personal characteristic
C. Taxes must be imposed based on the taxpayer’s inability to pay
D. Taxes must be imposed at different rates for taxpayers with different income levels

90. Which of the following entities are exempt from property taxation?
A. All entities that the engage in religious, charitable, educational, or nonprofit activities
B. Religious, charitable and education entities, nonprofit cemeteries, and churches
C. Nonprofit organizations that are registered with the Securities and Exchange Commission
D. All entities that are recognized as tax-exempt by the Bureau of Internal Revenue

81. What is the scope of the exemption of non-stock, nonprofit educational institutions from taxes and duties in the
Philippines?
A. All revenues and assets of non-stock, nonprofit educational institutions are exempt from taxes and duties,
regardless of their use
B. Only revenues of non-stock, non-profit educational institutions used for educational purposes are exempt from
taxes and duties
C. Only assets of non-stock, nonprofit educational institutions used for educational purposes are exempt from
taxes and duties
D. Only revenues and assets of non-stock, nonprofit educational institutions used actually, directly and
exclusively for educational purposes are exempt from taxes and duties

82. What is the principle of non-impairment of the jurisdiction of the Supreme Court in tax cases?
A. A constitutional provision that ensures that all Supreme Court’s authority to review tax cases is not diminished
or taken away by legislation or administrative action
B. A principle that allows Congress to pass laws that limit the power of the Supreme Court to review tax cases
C. A provision that grants the Bureau of Internal Revenue exclusive jurisdiction over all tax cases
D. A principle that allows the President to decide tax cases without judicial review

83. What is the prohibition on the use of special purpose fund?

A. A restriction imposed by the law on the use of funds that are earmarked for specific purposes or programs
B. A requirement that all public officials and employees must file their income tax returns every year
C. A provision that grants the President the power to allocate public funds at his or her discretion
D. A principle that allows government agencies to use the public funds for any purpose they deem necessary

84. What is the power of the President to veto any particular items in a revenue or tariff bill?
A. A constitutional power that allows the President to strike down specific provisions or items in a revenue or
tariff bill passed by Congress
B. A power that allows the President to unilaterally impose taxes without the approval of Congress
C. A provision that grants the Bureau of Internal Revenue exclusive jurisdiction over all tax cases
D. A principle that allows government agencies to use public funds for any purpose they deem necessary

85. What is the principle of due process of law in relation to Philippine taxation?
A. A principle that allows the government to impose taxes without regard for the legal rights of individuals
B. A principle that requires the government to respect and protect the legal rights of individuals, including the
right to a fair and impartial trial, the right to be heard, and the right to be free from arbitrary or discriminatory
actions by the government
C. A principle that grants the Bureau of International Revenue exclusive jurisdiction over all tax cases
D. A principle that allows the President to veto any particular items in a revenue or tariff bill

86. What is the principle of equal protection of the laws in relation to Philippine taxation?
A. A principle that allows the government to discriminate against certain taxpayers based on their personal
characteristics
 B. A principle that requires the government to treat all individuals equally under the law, without discrimination
based on race, gender, religion, or other personal characteristics
C. A principle that grants the Bureau of Internal Revenue exclusive jurisdiction over all tax cases
D. A principle that allows the President to veto any particular items in a revenue or tariff bill

87. Which of the following indirect constitutional limitations prohibits the government from using public funds to
support or promote a particular religion or religious practice?
A. Due process of law
B. Equal protection of the laws
C. Non-impairment of the obligations of contracts
D. No appropriation for religious purposes

88. What is the inherent limitation in Philippine taxation that requires public purpose and has now evolved to
include social justice?
A. Non-impairment of the obligations of contracts
B. Due process of law
C. Equal protection of the laws
D. Public Purpose

89. What is the inherent limitation in Philippine taxation hat requires taxes to be used for the support of the
government, specifically on its governmental functions?
A. Public Purpose
B. Due process of law
C. Equal protection of the laws
D. Non-infringement of religious freedom

90. What is the primary purpose of the levy even through the power of taxation can be used as an implement of
police power?
A. Public Purpose
B. Due Process Law
C. Equal Protection of the Laws
D. Revenue Generation

91. What is the proper term for an exaction if the purpose is primarily revenue, or if revenue is at least one of the
real and substantial purposes>
A. Tax
B. Fee
C. Penalty
D. Assessment

92. What is the inherent limitation on the power of taxation that requires taxes to be exacted only for a public
purpose and not for purely private purposes or for the exclusive benefit of private persons?
A. Public Purpose
B. Due Process of Law
C. Equal Protection of the Laws
D. Territoriality

93. What is the requirement that a tax law must satisfy, which is the heart of the law and ensures that the law is not
a mask to exact funds from the public for the undue benefit and advantage of private enterprises?
A. Public Purpose
B. Due Process of Law
C. Equal Protection of the Laws
D. Territoriality

94. What are the requisites of a valid taxpayer’s suit?

A. The tax money is being extracted and spent in violation of specific constitutional protection against abuses of
legislative power
B. Public money is being deflected to any improper purpose
C. Petitioner seek to restrain wastage of public funds through enforcement of an invalid law
D. All of the above

95. Which of the following concepts regarding a taxpayer’s suit is correct?

A. The public funds must be derived from taxation
B. It applies to donation and contributions made by public individuals or private entities
C. A taxpayer is relieved from the obligation to pay tax if he believes it is being misappropriated
D. A taxpayer has legal standing to question acts that do not involve the use of public funds
96.When are agencies and instrumentalities of the government tax-exempt?
A. When performing governmental functions
B. When performing proprietary functions
C. When performing both governmental and proprietary functions
D. When performing neither governmental nor proprietary functions

97. When can agencies and instrumentalities of the government be tax-exempt even if they are performing
proprietary functions?
A. When their franchise or law creating them exempts them from taxation
B. When they are authorized by the national government to be tax-exempt
C. When they are authorized by the local government unit (LGU) to be tax-exempt
D. When they are performing both governmental and proprietary functions

98. What type of government-owned or controlled corporation (GOCCs) are tax-exempt?

A. GOCCs with the original charter
B. GOCCs attached to the government
C. Unincorporated GOCCs
D. All of the above

99. Which of the following statements is true about tariffs?

A. Tariffs are a tax imposed on exported goods and services
B. Tariffs are a tax imposed on both imported and exported goods and services
C. Tariffs are a tax imposed only on domestic goods and services
D. Tariffs are a tax imposed only on imported goods and services

100. What is the effect of tariffs on trade?

A. Tariffs are used to promote free trade and reduce the price of imported goods and services
B. Tariffs have no effect on trade, as they only raise revenue for the government
C. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more
expensive to consumers
D. Tariffs are not used to promote domestic industries and discourage the production of certain goods