° CPA Review School of the Philippines Manila GENERAL do PRINCIPLES OF TAXATION Dela Cruz/De Vera/Lopez/Liama 1. The prines Principal purpose of taxation is ; 4. To encourage the growth of home industries through the proper use of tax exemptions and i incentives To implement the police power of the state ‘The reduce excessive inequalities of wealth To raise revenues for governmental needs aor ‘The aspects of taxation are Legislative in character Executive in character ~ Shared by the legislative and executive departments Judicial in character ange ‘Taxation as distinguished from police power and power of eminent domain Property is taken to promote the general welfare 6” b. May be exercised only by the government € Operates upon the whole citizenry 4. There is generally no limit as to the amount that may be imposed 7 ic service corporations and public 4. Which of the inherent powers may be exercised even bylpi entities a Power of taxation 2: Power of eminent domain b. Police power 4. AandC 5. Which of the following statements is correct? 2 Income tax isan indirect tax. ore ayil b. Our National Internal Revenue Laws are onuiial in nature. c. The theory of taxation states that the power of taxation is supreme, plenary, unlimit comprehensivé> notre 4. Taxation is subject to inherent and con tutional limitations. ~ 6. This is an inherent limitation on the power of texation a. Rule on uniformity and equity in taxation © b. Due process of law and equal protection of the laws « c. Non-impairment of the jurisdiction of the Supreme Court in tax cases ¢- 4. Tax must be for public purpose s 7. This is a constitutional limitation on the power of taxation a. Tax laws must be applied within the territorial jurisdiction of the state b. Exemption of government agencies and instrumentalities from taxation = ¢. No appropriation of public money for religious purposes ~ d. Power to tax cannot be delegated to private persons or entities + 8. The power to acquire private property upon payncent of just compensation for public purpose a. Power of taxation Power of eminent domain b. Police power d. Power of love 9. The power to regulate liberty and property to promote the general welfare a. Police power c. Power of eminent domain b. Power of taxation 4. Super power rangers Tax 84-01imposed a Fi shi Fiscal adequace W!@ Y Proportionate 1o the taxpayer's ability to pay Ath ek Sources of : expenditures" "YUE AS @ whole, should be sufficient to meet the demands of public a Ft, Sent iscal ad b. eae ©. Administrative feasibility Equality or theoretical justice d. Revenue generation © 12. The tax f a Phod ato be capable of convenient, just and effective administration Equality ov the’, : ©. Administrative feasibility Y OF theoretical justice 4. Psychological compatability © 13. Statement 1 — The poi S int on which a tax is originally imposed is i f taxation ta - : ly imposed is impact o Qn Statement 2~Police power 1s superior to the non-impairment clause of the constitution “ oo ~AS a rule, taxes are subject to ff or compensation - duty nt 4— As a rule, provisions on the validity of tax exemptions are resolved liberally in favor of the taxpayer ear aginst Statement 1 Statement2 Stafement3 Statement 4 a True False False False b. True True False True c True True False False 4d False ‘True False False © 14, Enforced proportional contributions from persons and property levied by the state by virtue ofits sovereignty for the support of the government and for all public needs a. Toll © Taxes - b. License fee 4d. Asessment © 15, Persons or things belonging to the same class shall be taxed at the same rate a. Simplicity in taxation c. Equality in taxation b. Reciprocity in taxation. Uniformity in taxation 16. Which is not an essential characteristic of a tax? a, Itis unlimited as to amount b. It is Payable in money - & ¢. Itis proportionate in character - d. Itis an enforced contribution- is an enforced proportional contribution from owners of land especially BW? ae ee bic improvement. Which one of the following is not considered as one of its characteristics? ous ie and 7 Steeda dae cvemmert's need oF money to support its legitimate objectives » bility of the persons assessed ~ c._Itis not a personal Li it derived bythe owners of the land - d._ It is based solely on ilege of not being imposed a financial obligation to which others are subject vil not is the pri | Ce Tpcentive € 7 azanesty b Tax exemptions Taxes lative power to tax, which is not correct? isla Prional testictions, and provided the subjects are within the p a. Where there sok of the state, Congress has unlimited discretion as to the teritora up ytions to be waxed, property oF 02 On onal robin, the House of Reprsentstives has the right to b. Intte absence es c dev sas of te ol 19, As to scope of the les©. The discretion of Congress in imy method a 0 posing taxes extends to the mode, if Rot restricted by the constitution. aepctra beanie The sole arbiter of the purpose for which taxes shall be levied Race tet Sac we eee: Se Ree Few ey of fy 20. Which of the following is a nature of taxation? levied © ser i b. iiseoenally av admimurtive acon tea perbe money — 4 D 21. The use of illegal or fraudulent means to avoid or defeat the payment of tax a. Shifting c. Avoidance ae cn b. Exemption d. Evasion + fA C 22. The use of legal or permissible means to minimize or avoid taxes. #0 a. Shifting ©. Avoidance b. Exemption d. Evasion A 23. Synonymous to tax evasion a. Tax dodging ~ ©. Tax exemption b. Tax minimization d. Tax shield o 24, Synonymous to tax avoidance a. Tax dodging c. Tax exemption b. Tax minimization- d. Tax evasion C25. Incase of doubt, fax statuteg ti construed a Strictly against the government and the taxpayer b. Liberally in favor of the government and the taxpayer ¢. Strictly against the government and liberally in favor of the taxpayer - d. Liberally in favor of the government and strictly against the taxpayer 1) 26. Incase of doubt, tax exemptions are construed a Strictly agaiast tie government and the axpayer b. Liberally in favor of the government and the taxpayer ¢. Strictly against the government and liberally in favor of the taxpayer d. Liberally in favor of the government and strictly against the taxpayer“ B 27. Incase of conflict between the Tax Code and the Philippine Accounting Standards (PAS) a. PAS shall prevail over the Tax Code b. Tax Code shall prevail over PAS ~ c. PAS and Tax Code shall be both disregarded 4. The taxpayer may choose between the PAS or the Tax Code fy 28. Tax of a fixed amount imposed upon all persons residing within a specified teritory without regard to their property or occupation they may be engaged in a. Personal, poll or capitation - c. Excise b. Property . Regressive g, 29. Tax imposed on personal or real property in proportion to its value or on some other method of apportionment a. Personal, poll or capitation c, Excise b. Property ” d. Regressive i inm C 30. Tax imposed upon the performance of an act, the enjoyment of privilege or the engaging occupation. ce fe a. Personal, poll or capitation c. Excise b. Property d. Progressive Tax 840"