TAX Quiz 1

PSBA REFRESHER COURSE
TAXATION QUIZ 1
1. Statement 1: A person may refuse to pay a tax on the ground that he receives no personal
benefit from it.
Statement 2: A taxpayer has a right to question illegal expenditures of public funds.
A. If only the first statement is correct.
B. If only the second statement is correct.
C. If both statements are correct.
D. If both statements are incorrect.
2. Statement 1: One of the essential characteristics of a tax is it is unlimited in amount.

Statement 2: A tax is generally unlimited because it is based on the needs of the state.
3. Statement 1: A License Fee is a charge imposed under the police power of the state.
Statement 2: Penalty is imposed by the state only.
4. Statement 1: Imposition of taxes is a legislative act.

Statement 2: Collection of taxes is an administrative act.
5. Statement 1: A state has the power to tax even if not granted by the Constitution.
Statement 2: A state cannot exercise police power if not granted by the Constitution.
6. Statement 1: There can only be a tax if there is a law imposing the tax.
Statement 2: The power to tax is inherent.
7. Statement 1: A tax is based on law while debt is based on contract.

Statement 2: A tax is also a custom’s duty.
8. Statement 1: A person cannot be imprisoned for non-payment of property tax.

Statement 2: A law may be passed violating uniformity of taxation.
9. Statement 1: The RDO is known as the alter ego of the BIR Commissioner.
Statement 2: The BIR Commissioner is directly under the President’s Office.
10. Statement 1: Provisions in the Philippine Constitution on Taxation are grants of power.
Statement 2: Due process of law in taxation in the Constitution is a grant of power.
11. Statement 1: An excise tax is also called privilege tax.

Statement 2: A tax which is neither personal nor property, is an excise tax.
12. Statement 1: Estate tax is a proportional tax.
Statement 2: A progressive tax is a tax, the rate of which is directly proportional to tax base.
13. Statement 1: Taxation without representation is not tyranny.

Statement 2: In the exercise of taxation, the state can tax anything at anytime and at any
amount.
14. Statement 1: Taxation and power of Eminent Domain may be exercised simultaneously.
Statement 2: Taxation and Police Power may be exercised simultaneously.
15. Statement 1: All of our tax laws are statutory laws.

Statement 2: The non-impairment clause is a statutory law on taxation.
16. Statement 1: Non-payment of tax makes the business illegal.

Statement 2: The non-payment of license fee makes the business illegal.
17. Statement 1: Margin fee is a tax.

Statement 2: Custom’s duty is a tax.
18. Statement 1: Territoriality is one of the constitutional limitations on the power of taxation.
Statement 2: International comity is an inherent limitation in taxation.
19. Statement 1: Taxes may be used for sectarian purposes if allowed by an ordinance.
Statement 2: The President can refuse to implement a tax law if it appears to be
unconstitutional.
20. Statement 1: There can be double taxation in the Philippines.

Statement 2: Double taxation is illegal if it violates the uniformity of taxation.
21. Statement 1: A progressive system of taxation means a tax structure where the tax base
increases as the tax rate increases.
Statement 2: Tax exemption is a grant of immunity to a particular taxpayer from tax where
others are obliged to pay.
22. Statement 1: Tax avoidance is a form of tax escape.

Statement 2: Tax evasion is not punishable.
23. Statement 1: A tax may include the power to destroy.

Statement 2: A tax may be imposed violating uniformity of taxation.
24. Statement 1: A tax may be subjected to set-off or compensation.
Statement 2: A tax ordinarily includes interest.
25. Statement 1: A tax bill may embrace more than one subject.
Statement 2: Non-payment of a tax cannot result to criminal liability on the part of the
taxpayer, only civil liability.
26. All are characteristics of the power of taxation, EXCEPT:

A. It is an inherent power.
B. It is legislative in character.
C. It is civil in character.
D. It is subject to inherent and constitutional limitations.
27. Our tax laws are:

A. Political in nature. C. Penal in nature
B. Civil in nature. D. Social in nature.
28. Also known as tax administration

A. Collection of taxes C. Payment of taxes.
B. Levying of taxes. D. Incidence of taxation
29. Taxation is an inherent power because:

A. It is the life blood of the government.
B. Protection and benefit theory.
C. It co-exists with the existence of the state.
D. It is exercised for the general welfare of the people.
30. All are essential characteristics of a tax, EXCEPT:

A. It is an enforced contribution.
B. It is generally unlimited in amount.
C. It is generally payable in money.
D. It is a proportionate burden.
31. A tax is invalid, EXCEPT:

A. Theory of taxation and its purpose are disregarded.
B. Basis of taxation is not recognized.
C. Inherent and constitutional limitations are not observed.
D. It results to double taxation.
32. All are secondary purposes of taxation EXCEPT:

A. Sumptuary purpose C. Compensatory purpose
B. Regulatory purpose D. Uniformity purpose
33. In the absence of inherent and constitutional limitation, the power of tax is:
A. Comprehensive C. Both a and b.
B. Unlimited D. Regulatory
34. All are similarities of taxation, police power, and power of eminent domain, EXCEPT
A. All are necessary attributes of the Constitution
B. All exist independently of the Constitution
C. All contemplate an equivalent benefit
D. All are superior to the non-impairment clause of the Constitution
35. Below are characteristics of a sound taxation system, EXCEPT:

A. Administrative feasibility and compliance
B. Fiscal adequacy
C. Theoretical justice
D. Uniformity of taxation
36. It refers to a fraudulent act of minimizing taxes:

A. Tax avoidance C. Tax minimization
B. Tax evasion D. Multiple taxation
37. One of the following is NOT an inherent limitation:

A. Taxes must be for public purposes
B. Equality in Taxation.
C. Territoriality rule
D. Rule on double taxation
38. All of the following is territoriality doctrine except one:

A. Residence of the taxpayer.
B. Source of the income.
C. Situs of the thing or property taxed.
D. International organizations
39. Taxation is equitable in all of the following, EXCEPT:

A. Its burden falls on those better to pay.
B. It is based on ability to pay.
C. It is based on benefits received.
D. It is based on uniformity rule.
40. The only tax where non-payment of which will not result to imprisonment:
A. Excise tax C. Personal tax
B. Donor’s tax D. Property tax
41. One of the following is NOT a major tax under the Tax Code:
A. Income tax C. Excise tax
B. Donor’s tax D. Estate tax
42. One of the following can be BOTH be a progressive tax and a proportional tax:
A. Donor’s tax C. Both a and b
B. Income tax on individuals D. Estate tax
43. A tax which is BOTH under taxation and Police Power:

A. Compensatory Tax C. National Tax
B. Regulatory Tax D. General Tax
44. A demand of Proprietorship:

A. Tax C. Toll
B. Special assessment D. License fee
45. Levied only on lands:

A. Tax C. Toll
B. Special assessment D. License fee
46. A proportional tax:

A. Individual income tax C. Donor’s tax
B. Corporate income tax D. Estate tax
47. Imposed to regulate conduct:

A. Tax C. Penalty
B. Toll D. License fee
48. An advalorem tax:

A. Real estate tax
B. Income tax
C. Excise tax on wine
D. Excise tax on cinematographic films
49. One of the following is NOT a source of our tax laws:

A. Administrative rulings and opinions
B. Judicial decisions
C. 1987 Constitution
D. Expert Opinion on Taxation
50. The government may not do all except one:

A. Tax itself
B. Delegate its power to tax to private agencies
C. Impose tax arbitrarily
D. Disregard uniformity in taxation
51. A form of tax escape through which one is given tax immunity wherein others are
subjected to tax:
A. Shifting C. Tax exemption
B. Tax immunity D. Tax avoidance
52. A form of tax escape by a manufacturer or producer who improves his proceeds of
production thereby minimizing his unit production cost:
A. Tax avoidance C. Transformation
B. Capitalization D. Shifting
53. A waiver by the government’s right to collect tax:

A. Tax exemption C. Tax avoidance
B. Tax amnesty D. Tax evasion
54. A tax imposed based on the number:

A. Income Tax C. Advalorem Tax
B. Specific Tax D. Custom’s duties
55. The theory which most justifies the necessity of taxation:

A. Protection and benefits theory
B. Revenue purposes theory
C. Lifeblood theory
D. Ability to pay theory
56. One of the characteristics of internal revenue laws is that they are:
A. Criminal in nature;
B. Penal in nature;
C. Political in nature;
D. Generally prospective in application.
57. Which of the following is not example of excise tax:

A. Transfer tax; C. Real property tax;
B. Sales tax; D. Income tax.
58. The following are similarities of the inherent power of taxation, eminent domain, and
police power, except one:
A. Are necessary attributes of sovereignty;
B. Interfere with private rights and property;
C. Superior to the non-impairment clause
D. Are legislative in character.
59. The power of taxation is inherent in sovereignty being essential to the existence of every
government. Hence, even if not mentioned in the Constitution the state can still exercise
the power.
It is essentially a legislative function. Even in the absence of any constitutional provision,
taxation power falls to Congress as part of the general power of law-making.
A. False; False C. True; True
B. False; True D. True; False
60. Which of the following is not a scheme of shifting the incidence of taxation?
A. The manufacturer transfer the tax to the consumer by adding the tax to the selling price
of the goods sold;
B. The tax forms part of the purchase price;
C. Changing the terms of the sale like FOB shipping point in the Philippines to FOB
destination abroad, so that the title passes abroad instead of in the Philippines.
D. The manufacturer transfer the sales tax to the distributor, then in turn to the wholesaler,
in turn to the retailer and finally to the consumer.
61. In case of conflict between the tax code and generally accepted accounting
principles(GAAP):
A. Both tax codes and GAAP shall be enforced;
B. GAAP shall prevail over tax code;
C. Tax code shall prevail over GAAP;
D. The issue shall be resolved by the courts.
62. Which of the following statements is not correct?

A. Taxes may be imposed to raise revenues or to regulate certain activities within the
state;
B. The state can have the power of taxation even if the Constitution does not expressly
give it the power to tax;
C. For the exercise of the power of taxation, the state can tax anything at any time;
D. The provisions of taxation in the Philippine Constitution are grants of power and not
limitations on taxing powers.
63. Tax as distinguished from license fee:

A. Non-payment does not necessary render the business illegal;
B. A regulatory measure;
C. Imposed in the exercise of police power;
D. Limited to cover cost of regulation.
64. Value-added tax is an example of:

A. Graduated tax;
B. Progressive tax;
C. Regressive tax;
D. Proportional tax.
65. Which statement refers to police power as distinguished from taxation?
A. It can only be imposed on specific property or properties;
B. The amount imposed depends on whether the activity is useful or not;
C. It involves the taking of property by the government;
D. The amount imposed has no limit.
66. 1st Statement - Tax exemptions are strictly construed against the government.
2 nd Statement – When the tax law is not clear and there is doubt whether he is taxable or
not, the doubt shall be settled against the government.
A. Only the first statement is correct.
B. Only the second statement is correct.
C. Both statements are correct.
D. Both statements are incorrect.
67. 1st Statement – The income from bank deposit of a Tax-exempt Catholic Church is
taxable.
2 nd Statement – The charitable contributions given to a church are also taxable.
A. True; False C. True; True
B. False; True D. False; False
68. 1st Statement - Tax imposed outside the situs of Taxation is void.
2 nd Statement – International Comity is an exception to the territoriality doctrine.
A. True; False C. True; True
B. False; True D. False; False
69. Imposed based on the control & superiority of one country over another:
A. TITHE C. TRIBUTE
B. TAX D. TOLL
70. Imposed based on religious obligation:
A. TITHE C. TRIBUTE
B. TAX D. TOLL
71. Taxes are:

A. Retroactive C. Generally proportional
B. Prospective D. Personal to the taxpayer
72. Statement 1: Non payment of tax will only result to civil liability
Statement 2: Tax liabilities of a corporation will not extend to the stockholders absolutely.
A. True, True C. False, True
B. False, False D. True, False
73. All are objectives of taxation except:

A. Revenue purpose
B. Regulation
C. Increase of social inequity
D. Encourage economic growth
74. Statement 1: Courts can review or inquire into the wisdom or advisability of a tax law.
Statement 2: Our constitution does not contain any provision granting tax exemption to the
government.
75. Statement 1: To be exempt from taxation under the Constitution land & buildings must be
exclusively and actually used for religious, educational or charitable purpose, even if not
directly.
Statement 2: Exemptions of non-profit schools are only limited to revenue and assets
derived from strictly school operations.
ANSWER KEY
1. B 33. C 65. B
2. B 34. D 66. B
3. A 35. D 67. B
4. C 36. B 68. C
5. A 37. B 69. C
6. C 38. D 70. A
7. A 39. C 71. D
8. D 40. C 72. B
9. D 41. C 73. C
10. D 42. C 74. C
11. C 43. B 75. C
12. B 44. C
13. B 45. B
14. B 46. B
15. D 47. D
16. B 48. A
17. B 49. D
18. B 50. A
19. D 51. C
20. C 52. C
21. B 53. B
22. A 54. B
23. A 55. C
24. D 56. D
25. D 57. C
26. C 58. C
27. B 59. C
28. A 60. C
29. C 61. C
30. B 62. D
31. D 63. A
32. D 64. D

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PSBA REFRESHER COURSE

2. Statement 1: One of the essential characteristics of a tax is it is unlimited in amount.

4. Statement 1: Imposition of taxes is a legislative act.

7. Statement 1: A tax is based on law while debt is based on contract.

8. Statement 1: A person cannot be imprisoned for non-payment of property tax.

11. Statement 1: An excise tax is also called privilege tax.

13. Statement 1: Taxation without representation is not tyranny.

15. Statement 1: All of our tax laws are statutory laws.

16. Statement 1: Non-payment of tax makes the business illegal.

17. Statement 1: Margin fee is a tax.

20. Statement 1: There can be double taxation in the Philippines.

22. Statement 1: Tax avoidance is a form of tax escape.

23. Statement 1: A tax may include the power to destroy.

26. All are characteristics of the power of taxation, EXCEPT:

27. Our tax laws are:

28. Also known as tax administration

29. Taxation is an inherent power because:

30. All are essential characteristics of a tax, EXCEPT:

31. A tax is invalid, EXCEPT:

32. All are secondary purposes of taxation EXCEPT:

35. Below are characteristics of a sound taxation system, EXCEPT:

36. It refers to a fraudulent act of minimizing taxes:

37. One of the following is NOT an inherent limitation:

38. All of the following is territoriality doctrine except one:

39. Taxation is equitable in all of the following, EXCEPT:

43. A tax which is BOTH under taxation and Police Power:

44. A demand of Proprietorship:

45. Levied only on lands:

46. A proportional tax:

47. Imposed to regulate conduct:

48. An advalorem tax:

49. One of the following is NOT a source of our tax laws:

50. The government may not do all except one:

53. A waiver by the government’s right to collect tax:

54. A tax imposed based on the number:

55. The theory which most justifies the necessity of taxation:

57. Which of the following is not example of excise tax:

62. Which of the following statements is not correct?

63. Tax as distinguished from license fee:

64. Value-added tax is an example of:

71. Taxes are:

73. All are objectives of taxation except:

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