CHAPTER III

NEGOTIATION
 Concept, Classification & Limitations on Situs, Double Exemption &
Nature & Distinction of the Power of Tax & Forms of Nature, Const.,
Characteristics Taxes Taxation Escape Application

10 10 10 10 10

20 20 20 20 20

30 30 30 30 30

40 40 40 40 40

50 50 50 50 50
Concept, Nature & Characteristics
questions
Question
for 10 points:

_________ are the enforced proportional and

pecuniary contributions from persons and property
levied by the law-making body of the state having
jurisdiction over the subject of the burden for the
support of the government and all public needs.
Answer
Taxes
Question
for 20 points:

Give at least one (1) Theory and Basis of Taxation

Answer
1. Existence of Government.
2. Reciprocal duties of state and inhabitants.
3. Public Purpose requirement for lawful taxation.
Question
for 30 points:

Give at least one (1) Nature of the power of taxation

Answer
1. It is Inherent in sovereignty.
2. It is legislative in character.
3. It is subject to constitutional and inherent
limitations.
Question
for 40 points:

Provide two (2) Essential Characteristics of Tax?

Answer
1.
2.
It is an enforced contribution.
It is proportionate in character.
3. It is generally payable in money.
4. It is levied on persons or property.
5. It is levied by the state which has jurisdiction over
the person or property.
6. It is levied by the law-making body of the state.
7. It is levied for public purpose or purposes.
Question
for 50 points:

What are the basic principles of a Sound Tax

System?
Answer
1. Fiscal Adequacy.
2. Equality and Theoretical Justice.
3. Administrative Feasibility.
Classification and Distinction of Taxes
questions
Question
for 10 points:

_______ is a sum of money for the use of

something, generally applied to the consideration
which is paid for the use of a road, bridge or the like,
of a public nature.
Answer
Toll
Question for 20 points:

________ is referred to as the power of the state to

enact such laws in relation to person and property
as may promote public health, public morals, public
safety and the general prosperity and welfare of its
inhabitants.
Answer
Police Power
Question for 30 points:

________ refers to the financial operations of all

levels of the government. Such operations include
budgeting, taxing, appropriating, purchasing,
borrowing, disbursing of funds, and regulating the
currency.
Answer
Public Finance
Question
for 40 points:

Taxes are generally classified into six (6) categories.

Give at least two (2) classifications.
Answer 1. As to subject matter or object.
2. As to who bears the burden.
3. As to determination of amount.
4. As to purpose.
5. As to scope.
6. As to graduation or rate.
Question
for 50 points:

Give at least 2 examples of an Indirect Tax.

Answer
1. value-added tax
2. Percentage taxes
3. Excise taxes on certain specific goods
4. Custom duties
Limitations on the Power of Taxation
Question
for 10 points:

Is a limitation on the power of taxation which

are expressly found in the Constitution or implied
from its provisions.
Answer
Constitutional Limitations
Question
for 20 points:

A person cannot be imprisoned for non-

payment of what kind of tax?
Answer
Poll Tax
Question for 30 points:

Under the Constitution non-stock, non-profit

educational institutions are exempted from what
kind of taxes. Give at least one (1).
Answer
1. Income tax
2. Property tax
3. Donors taxes
4. Custom duties
Question
for 40 points:

Give at least two (2) instances that an object or

expenditure is for a public purpose.
Answer
1. Financing of educational activities and programs.
2. Promotion of science.
3. Aid for victims of a public calamity.
Question
For 50 points:

What are the inherent limitation on the power

to tax? Give at least two (2).
Answer 1. Levy must be for a public purpose.
2. Non-delegation of the legislative power to tax.
3. Exemption from taxation of government entities.
4. International comity.
5. Territorial jurisdiction.
Situs, Double Tax & Forms of Escape
Question
for 10 points:

It literally means place of taxation.

Answer
Situs of Taxation
Question
for 20 points:

A non-resident citizen is taxable only on

income derived from what sources?
Answer
Sources from within the Philippines.
Question
for 30 points:

________ is the use of the taxpayer of illegal or

fraudulent means to defeat or lessen the payment
of a tax. It is also known as tax dodging.
Answer
Tax Evasion
Question
for 40 points:

Give at least two (2) kinds of Shifting.

Answer
1. Forward shifting
2. Backward shifting
3. Onward shifting
Question
for 50 points:

There are six (6) basic forms of escape from

taxation. Give at least three (3).
Answer 1. Shifting
2. Capitalization
3. Transformation
4. Evasion
5. Avoidance
6. Exemption
Exemption & Nature, Const.,
Application
Question
for 10 points:

Give one (1) ground for tax exemption.

Answer 1. Based on contract;
2. Based on some ground of public policy;
3. Created in a treaty on grounds of reciprocity, or
to lessen the rigors of international double or
multiple taxation.
Question for 20 points:

____________ is the grant of immunity to particular

persons or corporations or to persons or corporation
of a particular class from a tax which persons and
corporations generally within the same state or
taxing district are obliged to pay.
Answer
Exemption from Taxation
Question for 30 points:

Gifts made on account of marriage by parents

to each of their legitimate, recognized natural, or
adopted children to the extent of the first
P10,000.00 is exempt from what kind of tax?
Answer
Donors Tax
Question
for 40 points:

What is the General Rule in the application of

tax laws or ammendments.
Answer
Generally Prospective
Question
for 50 points:

Give at least two (2) Nature of a tax exemption.

Answer
1. A mere personal privilege of the grantee.
2. It is generally revocable by the government.
3. It implies a waiver.
4. It is not necessarily discriminatory.