Income Taxation Final 2

1. Why do we need to study income taxation?
As this subject course objective is to develop a working knowledge

of the basic principles and rules of the income tax system, we will
be benefit for it in the future. As a future Accountant we will be
serving different companies, these will apply to partnership and a
corporation. It also made us more knowledgeable of our rights in the
tax, to be familiar to different form of tax.
2. Discuss the lifeblood doctrine.

Taxes considered as the lifeblood of the nation, without it our
country will result into poorer and unbalance economy. As the taxes
serves as the major fund of projects like constructions of buildings
and for public services without it the society will lose it
sustainability.
3. Discuss the taxation power of the government.

Taxes are the major sources of the government revenue. Power of
taxation, affects only property rights and may be exercised only by
the government. Taxation and its imposition of compulsory, levies on
individual or entities by the governments. Taxes are levied in almost
every country of the world, primarily to raise revenue for
government expenditures, although they serve other purposes as
well.
4. Define tax and identify its elements.

Tax also called a per capita tax, or capitation tax. It is a tax that
levies a set amount per individual. It is an example of the concept of
fixed tax. There are many elements of tax; I only mention some
under the law. It is an enforced contribution, no country are
exempted on applying especially those workers. It is generally
payable in money. It is proportionate in character. It is levied on
persons, property, or the exercise of a right or privilege (Excise tax).
It is levied by the State which has jurisdiction over the subject or
object of taxation. It is levied by the law-making body of the State.
Lastly, it is levied for public purpose or purposes.
True or False
5. Eminent domain involves confiscation of prohibited commodities to

protect the well-being of the people. FALSE
6. Horizontal equity requires consideration of the circumstances of the
taxpayer. TRUE
7. Taxes are the lifeblood of the government. TRUE
8. Taxation is a mode of apportionment of government costs to the
people. TRUE
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9. There should be direct receipt of benefit before one could be
compelled to pay taxes. FALSE
10. The exercise of taxation power requires constitutional grant.
FALSE
11. Taxation is inherent in sovereignty. TRUE
12. Police power is the most superior power of the government.
Its exercise needs to be sanctioned by the Constitution. FALSE
13. All inherent powers presuppose an equivalent form of
compensation. TRUE
14. The reciprocal duty of support between the government and
the people underscores the basis of taxation. TRUE
15. Taxation under the same circumstance should be taxed
differently. FALSE
16. The scope of taxation is regarded as comprehensive, plenary,
unlimited and supreme. TRUE
17. No one shall be imprisoned for non-payment of tax. FALSE
18. The lifeblood doctrine requires the government to override its
obligations and contracts when necessary. FALSE
19. 2/3 of all members of Congress are required to pass a tax
exemption law. FALSE
20. The government should tax itself. FALSE
Multiple choice:
21. The point at which tax is levied is also called: B
a. Impact of taxation c. incidence of taxation
b. Situs of taxation d. assessment
22. Which of the following inappropriately describes the nature of

taxation? D
a. Inherent in sovereignty
b. Essentially a legislative function
c. Subject to inherent and constitutional limitation
d. Generally for public purpose
23. Which is correct? D

a. Tax condonation is a general pardon granted by the government.
b. The BIR has 5 deputy commissioners.
c. The government can still collect tax in disregard of a
constitutional limitation because taxes are the lifeblood of the
government.
d. The pres. of the Philippines can change tariff or imposts without
necessity of calling Congress to pass a law for that purpose.
24. International double taxation can be mitigated by any of the

following except: D
a. providing allowance for tax credit.
b. Provision of reciprocity provisions in tax laws.
c. Provision of tax exemptions.
d. Entering into treaties for form regional trade blockage against the
rest of the world.
25. A. The power to tax includes the power to exempt.B

B. the power to license includes the power to tax.
Which is true?
a. A only c. A and B
b. B only d. Neither A nor B
26. Which is not an object of taxation? C

a. Persons c. Transactions
b. Business d. Public properties
27. The courts cannot issue injunction against the government’s

effort to collect taxes is justified by: C
a. The lifeblood doctrine c. ability to pay theory
b. Imprescriptibility of taxes d. the doctrine of estoppel
28. Which does not properly describe the scope of taxation? C

a. Comprehensive c. discretionary
b. Supreme d. unlimited
29. All of these are secondary purposes of taxation except: D

a. To reduce social inequality
b. To protect local industries
c. To raise revenue for the support of the government
d. To encourage growth of local industries
30. Which tax exemption is irrevocable? D

a. Tax exemption based on contract
b. Tax exemption based on the constitution
c. Tax exemption based on law
d. Both A and B
31. Which is the primary purpose of taxation? A

a. To enforce contribution from its subjects for public purpose
b. To raise revenue
c. To achieve economic and social stability
d. To regulate the conduct of business or profession
32. When tax is collected upon someone who is effectively

reimbursed by another, the tax is regarded as A
a. Direct c. personal
b. Indirect d. illegal
33. All are ad valorem taxes, except one. Select the exception. D
a. Poll tax c. real property tax
b. Estate tax d. capital gains tax on real property capital asset
34. Taxation power can be used to destroy B

a. As a revenue measure c. as an implement of police
power
b. Even if the tax is invalid d. when the State is in dire need of
funds
35. Which is not a characteristic of tax? C

a. It is an enforced contribution c. it is subject to
assignment
b. It is generally payable in money d. it is levied by the law making
body of the state having jurisdiction
36. Which of the following is a local tax? A

a. Value added tax c. documentary stamp tax
b. Real property tax d. other percentage tax
37. Which is not a source of tax law? A

a. CHED regulation c. judicial decisions
b. BIR rulings d. Constitution
38. Tax as to purpose is classified as: B

a. Fiscal or regulatory c. national or local tax
b. Direct or indirect d. specific or ad valorem tax
39. Which is not a nature of tax? D

a. Enforced proportional contribution
b. Enforced within the territorial jurisdiction of the taxing authority
c. Levied by the lawmaking body
d. Generally payable in kind
40. Taxes that cannot be shifted by the statutory taxpayer are

referred to as: D
a. Direct taxes c. business taxes
b. Indirect taxes d. personal taxes
41. Which is a local tax? A

a. Donor’s tax c. business taxes
b. Indirect taxes d. excise tax
42. As to subject matter, taxes do not include: A

a. Property tax c. poll tax
b. Regulatory tax d. excise tax
43. Which is a national tax? C

a. Real property tax c. income tax
b. Community tax d. professional tax
44. Which of the following distinguishes license from tax? C
a. Unlimited as to imposition
b. Imposed for revenue
c. Does not render the business illegal
d. Pre activity in application
45. Which is correct? C

a. Taxes may be subject to compensation
b. Toll, being a demand of ownership, is exercised only by private
entities
c. Dacion en pago and cession in payment are applicable in
taxation
d. Special assessment applies only when public improvement is
made.
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1. Why do we need to study income taxation?

As this subject course objective is to develop a working knowledge

2. Discuss the lifeblood doctrine.

3. Discuss the taxation power of the government.

4. Define tax and identify its elements.

5. Eminent domain involves confiscation of prohibited commodities to

22. Which of the following inappropriately describes the nature of

23. Which is correct? D

24. International double taxation can be mitigated by any of the

25. A. The power to tax includes the power to exempt.B

26. Which is not an object of taxation? C

27. The courts cannot issue injunction against the government’s

28. Which does not properly describe the scope of taxation? C

29. All of these are secondary purposes of taxation except: D

30. Which tax exemption is irrevocable? D

31. Which is the primary purpose of taxation? A

32. When tax is collected upon someone who is effectively

34. Taxation power can be used to destroy B

35. Which is not a characteristic of tax? C

36. Which of the following is a local tax? A

37. Which is not a source of tax law? A

38. Tax as to purpose is classified as: B

39. Which is not a nature of tax? D

40. Taxes that cannot be shifted by the statutory taxpayer are

41. Which is a local tax? A

42. As to subject matter, taxes do not include: A

43. Which is a national tax? C

44. Which of the following distinguishes license from tax? C

45. Which is correct? C

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