Taxation 1a

First examination
Prof. Devzon Uy Porras, CPA, MSA

Multiple choice

1. Tax as distinguished from license fee:

a. non-payment does not necessarily render the business illegal
b. a regulatory measure
c. imposed in the exercise of police power
d. limited to cover cost of regulation

2. Which statement refers to police power as distinguished from taxation?

a. it can only be imposed on specific properly 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

3. The distinction of a tax from permit or license fee is that a tax is:
a. imposed for regulation
b. one which involves an exercise of police power
c. one in which there is generally no limit on the amount that may be imposed
d. answer not given

4. Which of the following is not an example of excise tax:

a. transfer tax
b. sales tax
c. real property tax
d. income tax

5. Value- added tax is an example of:

a. graduated tax
b. progressive tax
c. regressive tax
d. proportional tax

6. Statement 1: 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.
Statement 2: 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
b. false; true
c. true; true
d. true; false

7. The proportional contribution by persons and property levied by the law-making body of
the State by virtue of its sovereignty for the support of the government and all public
needs is referred to as:
a. taxes
b. special assessment
c. license fee
d. answer not given
8. One of the characteristics of a tax is that:
a. it is generally based on contract
b. it is generally payable in money
c. it is generally assignable
d. answer not given

9. Tax of a fixed proportion of the value of the property with respect to which the tax is
assessed and requires the intervention of assessors or appraisers to estimate the value of
such property before the amount due from each taxpayer can be determined is known as:
a. specific
b. ad valorem
c. special or regulatory
d. answer not given

10. Which of the following has no power of taxation?

a. provinces
b. cities
c. barangays
d. barrios

11. A tax must be imposed for a public purpose. Which of the following is not a public
purpose?
a. national defense
b. public education
c. improvement of the sugar industry
d. none of the above

12. The basic community tax of P 5.00 of an individual is:

a. a personal tax
b. a direct tax
c. a national tax
d. an ad valorem tax

13. A tax on business is:

a. direct tax
b. indirect tax
c. property tax
d. none of the above

14. Which statement is wrong?

a. a tax is a demand of sovereignty
b. a toll is a demand of ownership
c. a special assessment is a tax
d. custom duty is a tax

15. In this power of the state, the person who is parting with his money/property is presumed
to receive a benefit:
a. taxation
b. police power
c. eminent domain
d. none of the above
16. Under the basic principle of a sound tax system, the Government should not incur a
deficit:
a. theoretical justice
b. administrative feasibility
c. fiscal adequacy
d. none of the above

17. This is a demand of owners:

a. license fee
b. tax
c. toll
d. none of the above

18. No person shall be imprisoned for non-payment of this:

a. property tax
b. excise tax
c. poll tax
d. none of the above

19. As a basic principle of taxation, that “Taxes must be based on the taxpayer’s ability to pay ”
is called:
a. equality in taxation
b. ability to pay theory
c. theoretical justice
d. equity in taxation

20. Which is not essential characteristic of tax?

a. it is unlimited as to amount
b. it is payable in money
c. it is proportionate in character
d. it is a regular payment

21. Taxation is a means by which the national government attempts to

a. shift wealth from the rich to the poor
b. maintain price stability
c. encourage full employment
d. all of the above

22. The following are the basic principles of a sound tax system, except:
a. fiscal adequacy
b. collection of tax
c. theoretical justice
d. administrative feasibility

23. Tax as distinguished from license fee:

a. non-payment does not necessarily render the business illegal
b. a regulatory measure
c. imposed in the exercise of police power
d. limited to cover cost of regulation
24. Which statement is wrong? “The tax should be based on the taxpayer ’s ability to pay ”.
a. as a basic principle of taxation, this is called “theoretical justice ”
b. as a theory of taxation, this is called “ ability to pay theory”
c. no person shall be imprisoned for non payment of a tax
d. a graduated tax table is in consonance with this rule

25. Among the nature of taxation are the following, except:

a. it is a means by which the government raises income
b. it is inherent in sovereignty
c. the citizenry benefits from it
d. the government solely benefits from it

26. The City of Manila, claiming that it can impose taxes under the Local Government Code,
imposed a tax on banks (in addition to the 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. the power of taxation cannot be delegated
b. the rule on double taxation
c. uniformity of taxation
d. none of the above

27. Which statement is false?

a. a tax is a demand of sovereignty while a toll is a demand of property of ownership
b. non-payment of a tax does not make the activity taxed unlawful
c. a grant of police power to a unit of local government carries with it a grant of the
power to tax
d. customs duty is a tax

28. As to object, taxes may be classified according to the following, except:

a. personal, poll or capitation
b. specific
c. property
d. excise

29. The following are the sources of tax laws. Which is not a source?
a. Supreme Court decisions
b. Revenue regulations by the Department of Finance
c. Barangay resolutions
d. Treaties or international agreements

30. Which statement is wrong? A Revenue bill:

a. must originate from the House of Representative and on which same bill the Senate
may propose amendments
b. may originate from the Senate and on which same bill the House of
Representatives may propose amendments
c. may have a House version and a Senate version approved separately, and then
consolidated, with both houses approving the consolidated version
d. may be recommended by the President to Congress

POSITIVE THINGS HAPPEN TO POSITIVE PEOPLE.