Inherent Powers of the State A. B. C. D.

1
. The State, having sovereignty can enforce contributions (tax) upon its citizens Statement 1 Correct Correct Incorrect Incorrect
even without a specific provision in the Constitution authorizing it. Which of the Statement 2 Correct Incorrect Correct Incorrect
following will justify the foregoing statement?
Statement 1: It is so because the State has the supreme power to command .
5
Statement 1: The Constitution cannot take away the inherent powers of the
and enforce obedience to its will from the people within its jurisdiction, State but may only prescribe its limitations.
Statement 2: Any provision in the Constitution regarding taxation does not Statement 2: No laws are necessary to confer the inherent powers of the State
create rights for the sovereignty to have the power to tax but it merely upon any government exercising sovereignty.
constitutes limitations upon the supremacy of tax power. A. B. C. D.
A. B. C. D. Statement 1 Correct Correct Incorrect Incorrect
Statement 1 Correct Correct Incorrect Incorrect Statement 2 Correct Incorrect Correct Incorrect
Statement 2 Correct Incorrect Correct Incorrect
7. The power to demand proportionate contribution from persons and property to
2. The following statements correctly described the power of the State to tax, defray the necessary expenses of the government
except A. Power of eminent domain C. Power of taxation
A. The State can exercise the power of taxation only if it is expressly B. Power of recall D. Police power
mentioned in the Constitution.
B. It is a way of collecting and apportioning the cost of government among .
6
The power to regulate liberty and property to promote the general welfare
those who are privileged to enjoy its benefits. A. Power of eminent domain C. Power of taxation
C. It is a power inherent in every sovereign state to imposed a charge or B. Power of recall D. Police power
burden upon persons, properties or rights to raise revenues for the use and
support of the government and to enable it to discharge its functions. 9. The power to acquire private property upon payment of just compensation for
D. It passes a legislative undertaking through the enactment of laws by the public purpose
Congress which will be implemented by the Executive Branch of the A. Power of eminent domain C. Power of taxation
government through its Bureau of Internal Revenue to raise revenue for the B. Power of recall D. Police power
inhabitants in order to pay the necessary expenses of the government.
10. Which of the following requires public improvement?
2
. Which statement is wrong? I. Taxation
A. The money contributed as tax becomes part of public funds. II. Police Power
B. The power to tax is subject to inherent and constitutional limitations. III. Eminent domain
C. Generally, there is no limit on the amount of tax that may be imposed. A. I only C. I and III only
D. The power of taxation may be exercised by the government, its political B. III only D. II and III only
subdivisions, and public utilities.
11. The strongest of all inherent powers of the government is
3
. They exist independent of the constitution being fundamental power of the A. Power of eminent domain C. Power of taxation
state, except B. Power of recall D. Police power
A. Police power C. Power of recall
B. Power of eminent domain D. Power of taxation .
7
The following are the similarities among the Fundamental Powers of the State,
except:
4
. Statement 1: The constitution is the source of the State's taxing power. A. They can be abolished by the Constitution.
Statement 2: The police power of the government may be exercised through B. Each presupposes an equivalent compensation to the inhabitants.
taxation C. The emergence of the State carries with it these fundamental powers.
 D. They constitute the three methods by which the State interferes with private
property rights .
10
Statement 1. The power to tax is supreme, plenary, comprehensive and without
any limit because the existence of the government is necessity.
13. The following statement correctly states the differences among the inherent Statement 2. The discretion of Congress in imposing taxes extends to the
powers of the State, except? mode, method and kind of lax, even if the constitution provides otherwise.
A. The property taken under eminent domain and taxation are preserved but A. B. C. D.
that of police power is destroyed. Statement 1 Correct Correct Incorrect Incorrect
B. Police power regulates both property and liberty while eminent domain and Statement 2 Correct Incorrect Correct Incorrect
taxation affects only property rights.
C. Police power and taxation is exercised only by the government but eminent 18. How broad is the power of the legislature to impose taxes?
domain may be exercised by private entities. Answer 1: The legislature has limited discretion as to the persons, property or
D. Eminent domain does not require constitutional grant but taxation being occupations to be taxed, where there are no constitutional restrictions, provided
formidable, does in order to limit its exercise by the legislature. the property is within the territorial jurisdiction of the state.
Answer 2: The legislature has the right to finally determine the amount or rate
8
. Which of the following statements is not correct? of tax, in the absence of any constitutional prohibitions and it may levy a tax of
A. In the exercise of the power of taxation, the State can tax anything at any any amount as it sees fit.
time. A. B. C. D.
B. Taxes may be imposed to raise revenue or to provide disincentives to Answer 1 False False True True
certain activities within the State. Answer 2 False True False True
C. The State can have the power of taxation even if the Constitution does not
expressly give it the power to tax. 19. Which of the following statements is correct?
D. The power of taxation in the Philippine Constitution are grants of power and I. Taxes are pecuniary in nature
not limitations on taxing powers. ll. It co-exists with the existence of the State
9
III. Imposed on persons and property beyond the territorial jurisdiction of the
. The following are the differences between the Power of Taxation and the Power State
of Eminent Domain, except: a. I only c. I and II only
Power of Taxation Power of Eminent Domain b. ll only d. I, II and III
A. Attribute of sovereignty Fundamental power
B. Enforced proportionate Property to be taken is for public 20. Which of the following statements is correct?
contribution use I. A tax cannot be imposed without clear and express words for that purpose.
C. Government has no obligation to Gov't is a debtor of the property II. The provisions of a taxing act are not to be extended by implication
pay taken III. If the law is repealed, taxes assessed before repeal of the law may no
D. It operates in a community It operates on an individual longer be collected.
a. I and II only c. All of the above
16. Which of the following statements is not correct? b. II and III only d. None of the above
A. Taxation power exists inseparably with the State
B. The government automatically possesses the power to collect taxes from .
11
Statement 1: The amount of money raised for the government in the exercise of
its inhabitants its power to tax is and police power is based on the needs of the government.
C. The government can enforce contribution upon its citizens only when the Statement 2: The amount of money raised for the government in the exercise of
Constitution grants it its power of eminent domain is based on the cost of processing the transfer of
D. The State has the supreme power to command and enforce contribution property from private entities and/or individuals to the government.
from the people within its jurisdiction A. B. C. D.
 Statement 1 Correct Correct Incorrect Incorrect
Statement 2 Correct Incorrect Correct Incorrect 27. Which of the inherent powers maybe exercised even by public utility
companies?
.
12
Which of the following statements is true? A. Eminent domain C. Taxation
A. The power of eminent domain is created by the constitution. B. Police Power D. A and C
B. In police power, the property taken is preserved for public use.
C. The power of taxation and eminent domain are both exercisable only by the 28. Which of the following may not raise money for the government?
government and its political subdivision. A. Police power
D. The exercise of the power of eminent domain and police power can be B. Power of taxation
expressly delegated to the local government units by the law making body. C. Power of eminent domain
D. Privatization of government's capital assets
23. Statement 1: People pay taxes which their government uses to expand its
powers and territorial domination. 29. Which of the following entities in some circumstances may exercise the power
Statement 2: People demand from their government certain responsibilities and of eminent domain?
then provide the government with the means to carry them out. I. Electric cooperatives
A. B. C. D. II. Lending cooperatives
Statement 1 Correct Correct Incorrect Incorrect III. Water cooperatives
Statement 2 Correct Incorrect Correct Incorrect IV. Telecommunication companies
A. I and III only C. l, III and IV only
24. Statement 1: Taxation and Police Power may be exercised simultaneously. B. I, II and III only D. All of the above
Statement 2. In the exercise of taxation, the State can tax anything at any time
13
and at any amount. . Statement 1: Police power and the power of taxation are exercised primarily by
A. B. C. D. me legislature but not eminent domain.
Statement 1 Correct Correct Incorrect Incorrect Statement 2: Taxation and eminent domain interferes with private right and
Statement 2 Correct Incorrect Correct Incorrect property our not with police power.
A. B. C. D.
25. Statement 1: The power of taxation must first be expressly granted, either by Statement 1 Correct Correct Incorrect Incorrect
law or by the Constitution, before the State may validly exercise it. Statement 2 Correct Incorrect Correct Incorrect
Statement 2. The Philippine government may subject the land where embassies
of foreign governments are located to real property taxes. Theory and Basis of Taxation
A. B. C. D. 31. The existence of the government is a necessity and that the state has the right
Statement 1 Correct Correct Incorrect Incorrect to compel all individuals and property within its limits to contribute.
Statement 2 Correct Incorrect Correct Incorrect A. Basis of taxation C. Situs of taxation
B. Scope of taxation D. Theory of taxation
26. Statement 1: Since taxation presupposes an equivalent form of compensation, 14
there should be a direct and proximate advantage received by any taxpayer . The reciprocal duties of support and protection between the people and the
before he could be required to pay tax. government
Statement 2: Compensation under police power is the intangible feeling of A. Basis of taxation C. Situs of taxation
contribution to the general welfare of the people. B. Scope of taxation D. Theory of taxation
A. B. C. D.
Statement 1 Correct Correct Incorrect Incorrect 33. Which statements below express the lifeblood theory?
Statement 2 Correct Incorrect Correct Incorrect A. The assessed taxes must be enforced by the government
 B . Taxation is an arbitrary method of exaction by those who are in seat of
power .
17
A tax must be imposed for a public purpose. Which of the following is not a
C. The underlying basis of taxation is government necessity, for without public purpose?
taxation, a government can't neither exist nor endure A. Improvement of sugar industry C. Public education
D. The power of taxation is an inherent power of the sovereign to impose B. National defense D. None of the choices
burdens upon subjects and objects within its jurisdiction for the purpose of
raising revenues Aspects of Taxation
39. The levying and imposition of tax and the collection of tax are processes which
Purpose of Taxation constitute the taxation system
34. The principal purpose of taxation is: A. Aspects of taxation C. Nature of taxation
A. To raise revenue for governmental needs. B. Basis of taxation D. Theory of taxation
B. To reduce excessive inequalities of wealth.
C. To implement the police power of the State. 40. The following are the aspect of taxation
D. To encourage the growth of home industries through the proper use of tax I. Levying or imposition of the tax on persons, property or excises
incentives II. Collection of taxes already levied
III. Sufficiency of government’s sources to satisfy its expenditure
15
. After having been informed that most of the massage parlors in the city are A. I and II only C. II and III only
being used as fronts for prostitution, the Sanguniang Panlungsod of Manila B. I and III only D. I, II and III
passed a tax ordinance subjecting massage parlors within its jurisdiction to such
"onerous taxes" that leave them no other alternative but to stop operating. The 41. The official action of an officer authorized by law in ascertaining the amount of
passage of the ordinance is a valid exercise of tax due under the law from a taxpayer is
A. Eminent domain C. Police power and power of A. Assessment C. Delinquency
taxation B. Deficiency D. Distraint
B. Police power D. Taxation
42. Taxation is exercised both by the legislative and executive branch of the
16
. Statement 1: A provision on taxation in the Philippine Constitution is a grant of government.
power Which of the following is not the function of the Congress?
Statement 2: The power to tax includes the power to destroy. A. Assessment of tax liability C. Prescribing rules of taxation
Statement 3: Sumptuary purpose of taxation is to raise funds for the B. Fixing amount of tax D. Selecting the kind of tax
government
A. B. C. D. 43. Fixing the tax rate to be imposed is best described as a (an):
Statement 1 True True False False A. Tax legislative function.
Statement 2 True True True True B. Tax administration aspect.
Statement 3 True False True False C. Aspect of taxation which could be delegated.
D. Function that could be exercised by the executive branch.
37. Statement 1: Income tax collected from the taxpayers is the main source of
18
revenue on the local government. . All of the following are legislative aspect of taxation except
Statement 2: Taxes collected are the main source of revenue of the A. Fixing of tax rates
government. B. Valuation of property for taxation
A. B. C. D. C. Selection of the object or subject of tax
Statement 1 False False True True D. Prescribing the general rules of taxation.
Statement 2 False True False True
19
. All of the following are administrative functions of taxation except B. By authority conferred by Congress
A. Collection of taxes. C. Selection of object of tax C. By the issuance of the Department of Finance
B. Equalization of assessment D. Valuation of property for D. By the help of the Bureau of Internal Revenue
taxation
23
. When the power to tax is delegated to the local government
20
. Which of the following is correct? A. Only the local executive can exercise the power.
Legislative Administrative B. Only the legislative branch of the local government can exercise the power.
A. Assessment of tax No Yes C. The local executive and the legislative branch of the local government can
liability exercise the power.
B. Collection of tax Yes No D. Neither the local executive not the legislative branch of the local
C. Fixing of tax rates Yes Yes government can exercise the power.
D. Valuation of object of Yes No
tax 52. Levying of local government taxes may be exercised by:
A. The local executive only
.
21
The Commissioner of Internal Revenue is granted certain powers under the Tax B. The legislative branch of the local government only
Code. C. The local executive and the legislative branch of the local government unit
Which of the following is not a power granted to the Commissioner under the D. Neither the local executive nor the legislative branch of the local
code? government can exercise the power.
A. Issue summons and subpoena
B. Enact tax laws and make amendments 53. Which of the following statements is not correct?
C. Interpret tax laws and decide tax cases A. National legislation is exercised by Congress.
D. Make assessment and prescribe additional requirements B. Only the national government exercises the inherent power of taxation.
C. Interpretation of Tax Laws is done by the Legislative branch of government.
48. Which of the following statement is correct? D. Local government units could exercise the power of taxation through
A. The BIR shall have commissioners and a deputy commissioner. legislated delegation
B. The BIR Commissioner can delegate the power to abate tax liabilities.
C. The BIR has the authority to prescribe additional procedural/documentary Enactment of Tax Laws
requirements for taxpayers. 54. The legislative body enact laws to raise revenues in the absence of a
D. The BIR Commissioner has the power to interpret the provision of the Tax constitutional provision granting said body the power to tax. Which of the
Code without a need of review by the DOF Secretary. following statements will justify the enactment of such law?
I. The legislative body may enact tax laws even in the absence of a
LGU's Power to Tax constitutional provision because the power to tax is inherent in the
22
. Where does taxing power of the provinces, municipalities and cities precede government and not merely a constitutional grant.
from? II. The power of taxation is an essential and inherent attribute of sovereignty
A. Local legislation belonging as a matter of right to every independent government without
B. Constitutional grant being expressly granted by the people.
C. Legislative enactment A. I only C. Both I and II
D. Presidential decree or Executive act B. ll only D. Neither I nor II

Principles 55. The Congress enacted a new law, known as Expanded Value Added Tax Law.
50. How will the local government units be able to exercise their taxing powers? An association of taxpayers questions the constitutionality of this law on the
A. By local legislation ground that it did not originate exclusively in the House of Representatives as
 required by the Constitution, because it is in fact the result of the consolidation I. To insist that a revenue statute not only the bill which initiated the
of two distinct bills, one from the House of Representatives and the other from legislative process culminating in the enactment of the law - must
the Senate. Is the vat law unconstitutional? substantially be the same as the House bill would be to deny the Senate's
A. Yes, because the Senate has no authority to propose or concur any power not only to "concur with amendments" but also to "propose
amendments with the revenue or tax bill proposed by House of amendment."
Representatives. II. It would be to violate the coequality of legislative power of the two houses
B. No, because all appropriation, revenue or tariff bills, bills authorizing of Congress and in fact make the House superior to the Senate. Given the
increase of public debt, bills of local application, and private bills, shall be power of the Senate to propose amendments, il can propose its own
initiated by the Senate. version even with respect to bills which are required by the Constitution to
C. Yes, because all appropriation, revenue or tariff bills, bills authorizing originate in the House
increase of public debt. Bills of local application, and private bills, shall III. Filing in the Senate of a substitute bill in anticipation of its receipt of the bill
originate exclusively in House of Representatives. from the House is not prohibited under the Constitution, so long as the
D. No, because it is not the law but the revenue bill which is required by the action by the Senate as a body is withheld pending receipt of the House
constitution to originate exclusively in the House of Representatives and bill.
insisting otherwise would violate the coequality of legislative power of the A. I only C. I, II and III
two houses of Congress and in fact would make the House superior to the B. ll only D. None of the above
Senate.
58. The Congress, after much public hearing and consultations with various sectors
The next two questions are based on the following information. of society, came to the conclusion that it will be good for the country to have
The Constitution requires that all revenue bills shall originate "exclusively" from the only one system of taxation by centralizing the imposition and collection of all
House of Representatives. Assume that in 2018, Congressman Pedro Dela Cruz taxes in the national government. Accordingly, passed law that would abolish
proposed an expansion of the coverage of the value added tax to be known as e-vat the taxing power of all local government units. Would such a law be valid under
law. The proposed bill was approved by the House of Representatives later that year. the present Constitution?
However, the EVAT version of the Senate became the EVAT law. I. Yes, the law centralizing the imposition and collection of all taxes in the
national government would not contravene the Constitution as long as a
56. Which of the following statements will justify the enacted EVAT law? new law is enacted for the common good of the people.
I. The Constitution simply means that the initiative for filing revenue, tariff or II. No because under the present Constitution, each local government unit
tax bills must come from the House of Representatives on the theory that, shall have the power to create their own sources of revenue and to levy
elected as they are from the districts, the Members of the House can be taxes, fees, and charges subject to such guidelines and limitations as
expected to be more sensitive to the local needs and problems. Congress may provide consistent with the basic policy of local autonomy.
II. It is not the law but the revenue bill which is required by the Constitution to III. No. It is clear that Congress can only give the guidelines and limitations on
"originate exclusively" in the House of Representatives because a bill the exercise by the local governments of the power to tax but what was
originating in the House may undergo such extensive changes in the granted by the fundamental law cannot be withdrawn by Congress.
Senate that the result may be a rewriting of the whole, and a distinct bill A. I only C. I, II and III
may be produced. B. ll and III only D. None of the above
A. I only C. Both I and II
B. ll only D. Neither I nor II 59. The city council passed a tax ordinance imposing an occupation tax or
profession or occupation of an "industrial engineer". GJ is the only person with
57. Assuming Senator Juan Maharlika filed in the Senate a substitute e-vat bill "in such an occupation in the city. Which of the following is correct?
anticipation” of its receipt of the bill from the House. The proposal is totally A. The ordinance violates the constitutional rule of equality in taxation
different from the version of the lower house. Which of the following statements B. The ordinance is a "class legislation" since it does not subject to occupation
will justify the filing of a substitute bill by Honorable Senator Maharlika? tax the other industrial engineers.
 C. GJ can successfully challenge the validity of the ordinance being 63. One of the following is not a characteristic or an element of tax.
discriminatory since he is the only one adversely affected. A. It is an enforced contribution C. It is payable in money or in
D. The ordinance is a valid exercise of the council's power to enact tax kind
ordinance raise revenue under the Local Government Code. B. It is levied by the legislature D. It is proportionate in
character
60. Which of the following is incorrect?
A. Tax laws are neither political nor penal in nature. 64. Being legislative in nature, the power to tax may not be delegated, except:
B. The "ex post facto" rule is not applicable in taxation. A. When allowed by the Constitution
C. Taxes may be imposed retroactively by law but, unless so expressed by B. To local governments or political subdivisions
such law, these taxes must only be imposed prospectively. C. When delegation relates merely to administrative implementation that may
D. None of the above call for some degree of discretionary powers under a set of sufficient
standards expressed by law or implied from the policy and purpose of the
61. On January 1, 2017, the Congress enacted a law increasing the corporate Act.
income tax from 30% to 40%. The law provides retroactive effect starting D. All of the choices
January 1, 2010. The Philippine Chamber of Commerce questions the validity of
the law. Is the law constitutional? Sound Tax System
A. No, because the 40% interest rate is violation of due process of law for 65. All of the following, except one, are basic principles of a sound taxation system:
being excessive and unreasonable. A. Administrative feasibility C. Inherent in sovereignty
B. No, because the retroactive effect of the law constitutes deprivation of right B. Fiscal adequacy D. Theoretical justice
to property of corporation without due process of law.
C. Yes, because the power of taxation is an inherent power of a sovereign 66. Under this basic principle of a sound taxation system, the government should
State and it is based on the lifeblood doctrine and necessity theory. not incur a deficit:
D. Yes because the power of taxation is an essentially legislative power within A. Administrative feasibility C. Theoretical justice
the exclusive prerogative of the Congress that its wisdom is beyond the B. Fiscal adequacy D.. None of the above
reach of the Supreme Court.
67. The basic principle of a sound taxation system where. "Taxes must be based on
62. The 30% corporate income tax is increased to 35% by the Congress for the the taxpayer's ability to pay" is called:
purpose of raising revenue to be used for national road expansion project near A. Ability to pay theory C. Equity in taxation
Bonifacio Global City, a private corporation. Is the exercised of the taxing power B. Equality in taxation D. Theoretical justice
unconstitutional?
A. No, because it is exercised directly for public purpose and the benefit to a 68. The tax law must be capable of convenient, just and effective administration
private entity is only incidental. A. Administrative feasibility C. Rule of apportionment
B. Yes, because taxing power must be exercised exclusively for public B. Fiscal adequacy D. Theoretical justice
purpose without any incidental benefit to any private entity.
C. No, because the constitution does not expressly state that the power of Double Taxation
taxation must be used only for public purpose, thus, it may be used to 69. The following constitute double taxation, except one
benefit a private entity. A. Both taxes are levied for the same purpose
D. Yes, because the increase in tax rate constitutes deprivation of right to B. Both taxes are imposed in the same amount
property of corporation without due process of law for being excessive and C. Both taxes are imposed upon the same person
unreasonable D. Both taxes are imposed by the same taxing authority

Characteristics/Elements of Tax 70. Which is not a double taxation?

 A. A lessor of property pays a real estate tax and income tax on the same Statement 2 Correct Incorrect Correct Incorrect
property
B. Imposition of tax on corporate income and shareholder's dividends from the .
24
Which of the following is incorrect description of taxation?
same corporation A. Necessary and for public purpose
C. Imposition of tax on the finished products and the raw materials used in the B. Supreme and absolute power of the State
production of the said finished products. C. The strongest of all inherent powers of the State.
D. All of the above. D. Legislative and inherent for the existence of the government.

71. One of the following is a false statement about double taxation. Which is it? 76. Which limitation on the power of taxation inherently implied that the State's
A. There is no constitutional prohibition on double taxation. primary concern is for the common good of the people?
B. Absence of any of the elements of direct double taxation makes it indirect A. Due process of law C. Equality in taxation
duplicate taxation. B. Equal protection of law D. For public purposes
C. Direct duplicate taxation is a valid defense against a tax measure if it is
violative of the equal protection clause. 77. These are restrictions imposed by the Constitution.
D. A 20% final withholding tax on interest income on bank deposits and a 5% A. Inherent limitations
gross receipts tax on banks is a direct duplicate taxation. B. Constitutional limitations
C. Basic principles of sound tax system
72. Which of the following statements is correct? D. None of the choices
A. Indirect double taxation violates the Constitutional provision of uniformity
and equal protection. 78. Which of the following is a constitutional limitation on the power of taxation?
B. Indirect double taxation is legal as long as there is no violation of equal I. Territoriality of taxes
protection and uniformity clauses of the Constitution. II. Public purpose
C. There is direct double taxation in taxing the income of the corporation and III. Legislative in character
again subject the portion of that income declared as dividend to final tax. IV. Non-appropriation for religious purpose
D. All of the above A. ll only C. II and IV only
B. IV only D. III and IV only
73. The usual mode(s) of avoiding occurrence of double taxation is/are:
A. Tax credit of foreign taxes paid 79. "Equality in taxation" means:
B. Deduction for foreign taxes paid I. Progressive system of taxation shall be applied.
C. Reciprocal exemption, either by law or treaty II. The tax laws and their application must be fair, just, reasonable and
D. All of the above proportionate to one's ability to pay.
III. The tax laws shall give emphasis on direct rather than indirect taxes or on
Inherent and Constitutional Limitations the ability-to-pay principle of taxation.
74. Statement 1: Inherent limitations are the natural restrictions to safeguard and A. I only C. lll only
ensure that the power of taxation shall be exercised by the government only for B. ll only D. I, II and III
the betterment of the people whose interest should be served, enhanced and
protected. 80. Statement 1: Uniformity in the imposition and/or collection of taxes means that
Statement 2: Constitutional limitations are provisions of the fundamental law of all taxable articles or kinds of property of the same class shall be taxed at the
the land that restrict the supreme, plenary, unlimited and comprehensive same rate. This requirement is complied with when the tax operates with the
exercised by the State of its inherent power to tax. same force and effect in every place where the subject of it is found.
A. B. C. D. Statement 2: Uniformity rule is not violated when different articles are taxed at
Statement 1 Correct Correct Incorrect Incorrect different amounts provided that the rate is uniform on the same class
 everywhere with all people at all times. D. None of the above
A. B. C. D.
Statement 1 Correct Correct Incorrect Incorrect 85. One of the following is not a Constitutional limitation on the power of taxation?
Statement 2 Correct Incorrect Correct Incorrect A. Exemption of the government from taxes.
B. Non-infringement of religious freedom and worship.
81. Statement 1. A tax is deemed to have satisfied the uniformity rule when it C. Non-impairment of the jurisdiction of Supreme Court in tax cases
operates with the same force and effect in every place where the subject may D. Exemption from taxes of revenues and assets of educational institutions,
be found including grants, endowments, donations and contributions
Statement 2. The equal protection clauses of the Constitution forbid
classification based on real and substantial differences having a reasonable 86. This stems from the principle that we pay taxes for the protection and services
relation to the subject of the particular legislation. provided by the taxing authority which could not be provided outside the
A. B. C. D. territorial boundaries of the taxing state.
Statement 1 Correct Correct Incorrect Incorrect A. The tax imposed should be for public purpose.
Statement 2 Correct Incorrect Correct Incorrect B. Exemption of government entities from taxation.
C. There should be no improper delegation of the taxing power.
82. Which of the following statements correctly described "Equal protection" clause D. The power to tax is limited to the territorial jurisdiction of the taxing
of the Constitution regarding the government's power to tax? government.
I. All persons subject to legislation shall be treated alike under similar
circumstances and conditions, both in the privileges conferred and liabilities 87. Compliance with procedural requirements must be followed strictly to avoid
imposed collision between the State's power to tax and the individual's recognized rights.
II. The purpose is to protect persons belonging to the same class against A. Due process of law
intentional and arbitrary discrimination. B. Equality in taxation
III. There is denial of equal protection of laws if there is discrimination in the C. Non-infringement of religious freedom
implementation of tax laws. D. Non-impairment of obligations and contracts
A. I and II only C. II and III only
B. I and III only D. l, ll and III 88. No person shall be imprisoned for non-payment of this.
A. Excise tax C. Poll tax
83. A fundamental rule in taxation is that "the property of one country may not be B. Income tax D. Property tax
taxed by another country". This is known as
A. International comity C. International law 89. This requires that all subjects or objects of taxation, similarly situated are to be
B. International inhibition D. Reciprocity treated alike or put on equal footing both in privileges and liabilities.
A. Due process C. Uniformity
84. May the Philippine government require tax withholding on the salaries of Filipino B. Progressive taxation D. None of the choices
employees working in the American Embassy in the Philippines?
A. No, because this will violate the rule on international comity. 90. The following are the constitutional limitations on the power of taxation, except
B. No, because if the Philippine government would impose the requirement of A. The rule of taxation shall be uniform.
tax withholding on the salaries of Filipino employees working in the B. Non-impairment of the obligation of contracts.
Philippine Embassy in the Philippines, this would in effect require that the C. Taxes are not subject to set-off or compensation.
American government be constituted as the withholding agent of the D. Only Congress can exercise the power of taxation
Philippine government insofar as the taxes on the salaries of the Filipino
employees are concerned Exemption from Taxation
25
C. Both (A) and (B). . No law granting any tax exemption shall be passed without the concurrence of -
 A. Majority of all members of Congress .
26
Juan Dela Cruz Memorial Hospital is a 100-bed domestic hospital organized for
B. 2/3 vote of all members of Congress charitable purposes. However, out of 100-bed capacity, 40-beds are allotted for
C. 3/4 vote of all members of Congress paying patients, while the rest are intended for charity patients. The revenues
D. Unanimous vote of all members of Congress generated from these paying patients, however, are being used to improve the
facilities of the hospital. Can said hospital claim exemption from income tax as
92. Mapagbigay School, a non-stock non-profit educational institution, bought from well as real property tax?
Pedro, a resident citizen, his residential house and lot Pedro would be using the Answer 1: Yes, the hospital can claim exemption from real property tax. As a
proceeds of the sale to buy his new residential house and lot. On the other general principle, a charitable institution does not lose its character as such and
hand, the school will use the parcel of land to construct a new building for its its exemption from taxes simply because it derives income from paying patients,
dormitory for its medical students. Which of the following statements regarding whether out-patient, or confined in the hospital, or receives subsidies from the
liability for the payment of capital gains tax is correct? government, so long as the money received is devoted or used altogether to the
I. Pedro is liable to capital gains tax. However, if what was sold was his charitable object which it is intended to achieve; and no money inures to the
principal residence, he may apply for tax exemption, provided that he private benefit of the persons managing or operating the institution.
complies with the requirements laid down in the Tax Code. Answer 2: The hospital is subject to 10% tax on its net income, subject to
II. Pedro is not liable to capital gains tax because the sale was made in favor compliance with the "predominance test”.
of a non-stock, non-profit educational institution and that the property will A. B. C. D.
be used for educationally-related functions. Answer 1 Correct Correct Incorrect Incorrect.
III. Pedro is liable to capital gains tax because the tax is imposed on the seller; Answer 2 Correct Incorrect Correct Incorrect
thus, notwithstanding any exemption enjoyed by the buyer, the tax shall still
be imposed. .
27
Saint Mary's University (SMU) is a non-stock, non-profit educational Institution
A. I only C. I and II only registered with Securities and Exchange Commission (SEC) as a corporation.
B. ll only D. I and III only For the year ended December 31, 2018. It reported rental income amounting to
P150M from various tenants leasing portions of the said corporation. The
93. As an incentive for investors, a law was passed giving newly established Bureau of Internal Revenue (BIR) assessed SMU P45M decency income tax for
companies in certain economic zone exemption from all taxes, duties, fees, rental income earned is the action of the BIR proper?
imposts and on for a period of three years. ABC Corporation was organized and A. Yes, because leasing of property is not actually, directly and exclusively
was granted such incentive. In the course of business, ABC purchased related to educational purposes.
mechanical equipment from XYZ Incorporated. The latter, in its ordinary B. Yes, because taxes are the lifeblood of the government and tax
business dealings, is subject to vat. XYZ Inc. claims, however, that since it sold exemptions are construed strictly against the taxpayer and liberally in favor
the equipment to ABC Corp, which is tax exempt, it should not be liable to pay of the government.
the vat. Is this claim tenable? C. No, because a proprietary educational institution shall be subject only to
A. Yes, applying uniformity rule. 10% preferential corporate income tax.
B. Yes, exemption from tax should not be discriminatory in nature. A seller of D. No, because all revenues of non-stock, non-profit educational institution
goods or service to tax exempt individuals or entities shall be accorded the shall be exempt from taxes and duties as long as they are used actually,
same exemption provided by law to a buyer. directly and exclusively for educational purposes.
C. No. Exemption from taxes is personal in nature and covers only taxes for
which the taxpayer-grantee is directly liable. Vat is a tax on the seller who .
28
Mike is the owner of a 5,000 sq. m. parcel of land located in New Manila,
is not exempt from taxes. Since XYZ Inc. is directly liable for the vat and no Quezon City. He leased the property for P500.000 a year to a religious
tax exemption privilege is ever given to him, its claim that the sale is tax congregation for a period of ten (10) years. The religious congregation built on a
exempt is not tenable. 1,000 sq. m portion a seminary and a chapel which it used in connection with its
D. None of the above religious activities. It also constructed a ten (10) story building on the remaining
4,000 sq. m which it rented out to various commercial establishments, the
 proceeds of which go to the support of its various seminaries located Situs Taxation
throughout the Philippines. These seminaries are organized as non-profit and 100. It literally means "place of taxation" the country that has the power and
non-stock educational institutions. jurisdiction to levy and collect the tax
Which of the following is the correct tax implication of the foregoing data with A. Basis of taxation C. Situs of taxation
respect to payment of income tax? B. Scope of taxation D. Theory of taxation
A. The religious congregation is exempt from payment of income taxes on
rental receipts provided not more than 30% of its receipts were used for 101. Which among the following concepts of taxation is the basis for the situs of
administrative purposes. income taxation?
B. The religious congregation is exempt from payment of income taxes on A. Compensatory purpose of taxation C. Sumptuary purpose of
rental receipts because the collections were used to support its various taxation
seminaries located throughout the Philippines. B. Lifeblood doctrine of taxation D. Symbiotic relation in taxation
C. The religious congregation is subject to income taxation. The constitutional
tax exemptions refer only to real property that are actually, directly and .
29
The least source of tax laws:
exclusively used for religious, charitable or educational purposes, and that A. Presidential decrees C. Statutes
the only constitutionally recognized exemption from taxation of revenues B. Revenue regulations D. Tax treaties or conventions
are those earned by non-profit, non-stock educational institutions which are
actually, directly and exclusively used for educational purposes. 103. Statement 1: A revenue regulation must not be contrary to the provision of the
D. None of the above law that it implement
Statement 2 A revenue regulation cannot expand the provision of the law that it
97. The basis or test of exemption of real properties owned by religious or implements by imposing a penalty when the law that authorizes the revenue
charitable entities from real property taxes is regulation does not impose a penalty
A. Use of the real property A. B. C. D.
B. Location of the real property Statement 1 Correct Correct Incorrect Incorrect
C. Ownership of the real property Statement 2 Correct Incorrect Correct Incorrect
D. Ownership or location real property at the option of the government
104. Which of the following is not a source of our tax laws?
98. "Government agencies performing governmental functions are exempt from tax I. Supreme Court Judicial Decisions
unless expressly taxed while those performing proprietary functions are subject II. SEC Regulations and Rulings
to tax unless expressly exempted" refers to: III. Bureau of Customs Memorandum Orders
A. The tax imposed should be for public purpose. IV. Administrative rules and regulations
B. Exemption of government entities from taxation V. Legislations, tax treaties and tax ordinances
C. There should be no improper delegation of the taxing power. VI. Opinion of authors
D. The power to tax is limited to the territorial jurisdiction of the taxing A. II and VI only C. II, III and VI only
government. B. ll, lll and I only D. None of the above

99. A taxpayer gives the following reasons for refusing to pay a tax. Which of his 105. Which of the following statements is correct?
reasons is not acceptable for legally refusing to pay the tax? A. The revenue regulations which are in conflict with law(s) are null and void.
A. That there is lack of territorial jurisdiction. B. The interpretations of the former Secretary of Finance do not necessarily
B. That he will derive no benefit from the tax. bind their successors
C. That he has been deprived of due process of law. C. Revenue regulations have the force and effect of law and a memorandum
D. That the prescriptive period for the tax has lapsed. order of the Commissioner of Internal Revenue, approved by the Secretary
of Finance, has the same force and effect as revenue regulations
 D. All of the above. 114. Tax which imposes a specific sum by the head or number or by some standards
of weight or measurement and which requires no assessment other than a
Types of Taxes listing or classification of the objects to be taxed
106. The Philippine income tax system has the following features, except A. Ad-valorem C. Revenue
A. Indirect rather than direct system. B. Excise D. Specific
B. Semi-global and semi-schedular system.
C. The individual income tax system is mainly progressive in nature. 115. Tax which is a fixed proportion of the amount or value of the property with
D. Comprehensive tax situs by using the nationality, residence, and source respect to which the tax is assessed
rules. a. Ad-valorem c. Excise
b. Specific d. Revenue
107. Tax of a fix amount imposed among all persons residing within a specified
territory without regard to their property or occupation they may be engage 116. This type of tax requires an assessment of the value of the subject of tax
A. Excise tax C. Property A. B. C. D.
B. Personal, poli or capitation tax D. Regressive Ad valorem tax False False True True
Specific tax False True False True
108. Tax imposed on personal or real property in proportion to its value or some
other reasonable method of apportionment 117. JJ is a mining operator. The tax he has to pay is based on the actual value of
A. Excise tax C. Property the gross output or mineral products extracted is
B. Personal poll or capitation tax D. Regressive A. Ad valorem tax C. Rental
B. Mining tax D. Royalties
109. Which of the following is not an example of excise tax?
A. Income tax C. Sales tax 118. Tax levied for particular or specific purpose irrespective of whether revenue is
B. Real property tax D. Transfer tax actually raised or not
A. Ad valorem tax C. Revenue tax
110. Tax which is demanded from the persons whom the law intends or desires to B. Regulatory tax D. Specific tax
pay it
A. Direct C. Income 119. Tax based on a fix percentage of the amount of property, income or other basis
B. Excise D. Indirect to be taxed
A. Indirect C. Proportional
111. Tax which is demanded from one person in the expectation and intention that B. Progressive D. Regressive
he shall indemnify himself at the expense of another
A. Direct C. Income 120. Tax where the rate decreases as the tax base increases
B. Excise D. Indirect a. Progressive c. Regressive
b. Proportional d. Indirect
112. One is not a direct tax
A. Income tax C. Transfer Tax 121. Tax where the rate increases as the tax base increases
B. Immigration tax D. Value-added tax A. Indirect C. Proportional
B. Progressive D. Regressive
113. A tax on business is
A. Direct tax C. Indirect tax 122. A tax classified as a regressive tax.
B. Income Tax D. None of the choices A. excise tax C. value added tax
B. real estate tax D. none of the choices
 130. Which of the following is not a characteristic of debt?
123. Which of the following taxes is always proportional? A. Assignable
A. donor's tax C. income tax B. Payable only in money.
B. estate tax D. value added tax C. Generally arises from contract.
D. Imprisonment is not a sanction for non-payment.
30
. Which of the following individual taxpayers is not covered by progressive tax?
A. resident alien 131. Debt as distinguished from tax.
B. resident citizen A. Based on law
C. non-resident alien engaged in trade B. May be paid in kind
D. non-resident alien not engaged in trade C. Does not draw interest except when delinquent
D. Generally not subject to set-off or compensation
Tax vs. Other Impositions
125. Tax as distinguished from license fee .
33
"Schedular system of income taxation" means
A. A regulatory measure. A. Capital gains are excluded in determining gross income.
B. Limited to cover cost of regulation. B. All types of income are added together to arrive at gross income.
C. Imposed in the exercise of police power. C. Separate graduated rates are imposed on different types of income.
D. Non-payment does not necessarily render the business illegal. D. Compensation income and business/professional income are added
together in arriving at gross income.
126. The distinction of a lax from permit or license fee is that a tax is
A. imposed for regulation 133. Under the Creditable Withholding Tax system, which of the following statements
B. One which involves exercise of police power is incorrect?
C. One in which there is generally no limit on the amount that may be A. Taxes withheld under this system are creditable in nature.
imposed. B. The recipient of the income is no longer required to file an income tax
D. Answer not given return as prescribed under the Tax Code.
C. The payee is required to report the income and pay the difference between
31
. Which of the following terms describes this statement that the State has the tax withheld and the tax due thereon.
complete discretion on the amount to be imposed after distinguishing between a D. Taxes withheld on certain income payments are intended to equal or at
useful and non-useful activity? least approximate the tax due of the payee on said income.
A. Customs duty C. Тах
B. License Fee D. Toll 134. Which of the following statements is correct?
A. Withholding tax system is designed to improve the government's cash flow.
128. Toll as distinguished from tax. B. Withholding tax liability may arise only when the agent has possession,
A. Demand of sovereignty custody or control of the funds withheld.
B. Imposed by government only C. The withholding tax system was devised to provide the taxpayer a
C. Paid for the support of the government convenient manner to meet his probable income tax liability and to ensure
D. Amount is based on the cost of construction of public improvement used collection of the income tax which could otherwise be lost or substantially
reduced through failure to file the corresponding returns.
32
. Which statement is wrong? D. All of the above.
A. A special assessment is a tax. C. A toll is a demand of
ownership. 135. Under the Final Withholding Tax system which of the following statements is not
B. A tax is a demand of sovereignty. D. Customs duty is a tax. correct?
A. The payee is no longer required to file an income tax return for the
 particular income. against the one claiming the exemption.
B. The liability for payment of the tax rests primarily on the payee as a C. Where doubts exist in determining the intent of legislature, the doubt must
recipient of income be resolved strictly against the taxpayer and liberally in favor of the taxing
C. In case of failure to withhold the tax, the deficiency tax shall be collected authority
from the withholding agent. D. All of the above.
D. Income tax withheld by the withholding agent is constituted as a full and
final payment of the income tax due from the payee on the said income 141. In cases of deductions and exemptions, doubts shall be resolved
A. Liberally in favor of the taxpayer C. Strictly against the taxpayer
136. When the refund of a tax supposedly due to the taxpayer has already been B. Strictly against the government D. None of the choices
barred by prescription and the said taxpayer is assessed with a tax at present,
the two taxes may be set-off with each other. This doctrine is called 142. Statement 1: In case of conflict between a revenue regulation and the provision
A. Doctrine of reciprocity C. Set-off doctrine of the
B. Equitable recoupment D Tax sparring doctrine National Internal Revenue Code, the latter shall prevail.
Statement 2: The revocation of a revenue regulation cannot be made
137. Rule of "No estoppel against the government' means retroactive even if the reason for its revocation is that it is erroneous or contrary
A. Rule of law that in the performance of its governmental functions, the state to law.
cannot be estopped by the neglect of its agents and officers. A. B. C. D.
B. The government is not estopped by the mistakes or errors of its agents Statement 1 Correct Correct Incorrect Incorrect
erroneous application and enforcement of law by public officers do not Statement 2 Correct Incorrect Correct Incorrect
block the subsequent correct application of statutes.
C. Both a and b 143. Which of the following is correct regarding the purpose(s) of revenue
D. Neither a or b regulations issued by the Department of Finance through the Bureau of Internal
Revenue?
Interpretation of Ambiguities in Taxation A. To clarify and explain the law
34
. In case of ambiguity, tax laws imposing a tax shall be interpreted B. To properly enforce and execute the laws
A. Strictly against the taxpayer C. To carry into effect the law's general provisions by providing details of
B. Liberally in favor of the taxpayer administration and procedure.
C. Liberally in favor of the government D. All of the above
D. None of the choices
144. The Secretary of Finance, upon recommendation of the Commissioner of
139. Which of the following propositions may be untenable? Internal Revenue issued a Revenue Regulation using gross income as the tax
A. The Supreme Court has jurisdiction to review decisions of the Court of Tax base for corporations doing business in the Philippines. The revenue regulation
Appeals is
B. The court should construe a law granting tax exemption strictly against the A. Not valid because the action of the Secretary constitutes legislation which
taxpayer. is exclusively within the powers of the legislative branch of the government.
C. The court should construe a law granting a municipal corporation the power B. Valid Corporations are already taxable under our existing tax laws. Hence,
to lax most strictly the action of the Secretary constitutes administrative action only which is
D. None of the above. within his powers
C. Valid if the tax is limited to gross income without deductions. Such action is
140. Which of the following is incorrect? not tantamount to changing the amount of the tax as said amount ultimately
A. Tax cannot be imposed without clear and express words for that purpose. depends on the taxable base.
B. The exemption contained in the tax statutes must be strictly construed D. None of the above
 150. Transfer of the tax burden by one whom the tax is assessed to another
145. Which of the following is required for validity of rules and regulations? A. Capitalization C. Tax exemption
I. They must not be contrary to law and the Constitution. B. Shifting D. Transformation
II. They must be published in the Official Gazette or a newspaper of general
circulation 151. Pedro sold a parcel of land classified as capital asset to Juan. The parties
A. I only C. Both I and II agreed that the capital gains tax shall be shouldered by Juan. Is this a form of
B. ll only D. Neither I nor II Shifting? Is the Stipulation valid?
A. B. C. D.
Tax Avoidance vs. Tax Evasion Shifting No No Yes Yes
Stipulation No Yes No Yes
Escape from Taxation and Other Topics
146. The use of illegal or fraudulent means to avoid or defeat the payment of tax 152. Which of the following statements is correct?
A. Avoidance C. Exemption I. Shifting will result in increase prices
B. Evasion D. Shifting II. Tax evasion is also known as tax dodging
A. I only C. I and II
147. The exploitation by the taxpayer of legally permissible alternative tax rates or B. ll only D. Neither I nor ll
methods of assessing taxable property or income, in order to reduce tax liability.
It is otherwise known as tax minimization 153. _____________is finding out means of improvement in production so as
A. Tax avoidance C. Tax exemption savings would compensate for taxes paid by manufacturers or producers.
B. Tax evasion D. Transformation A. capitalization C. tax dodging
B. shifting D. transformation
148. Statement 1: Tax avoidance is a scheme used outside of those lawful means to
escape tax liability. 154. Which of the following statements regarding "Taxpayer's Suit" is incorrect?
Statement 2: Tax avoidance is a tax saving device within the means sanctioned A. Taxpayers have "locus standi" to question the validity of tax measures or
by law, and when availed of, it usually subjects the taxpayer to further or illegal expenditures of public money.
additional civil or criminal liabilities. B. It is a case where the act complained of directly involves the illegal
A. B. C. D. disbursement of public funds derived from taxation.
Statement 1 Correct Correct Incorrect Incorrect C. A taxpayer is relieved from the obligation of paying a tax because of his
Statement 2 Correct Incorrect Correct Incorrect belief that it is being misappropriated by certain officials
D. It is one brought or filed by a taxpayer arguing the validity of a tax statute
149. Pedro's income from leasing his property reaches the maximum rate of tax and its enactment or the constitutionality of its alleged public purpose.
under the law.
He donated one-half of his said property to a non-stock, non-profit educational 155. The Philippine Income tax system has the following features, except
institution whose income and assets are actually, directly and exclusively used A. Indirect rather than direct system.
for educational purposes, and therefore qualified for tax exemption under Article B. Semi-global and semi-schedular system.
XIV, Section 4 (3) of the Constitution and Section 30 (h) of the Tax Code. C. The individual income tax system is mainly progressive in nature
Having thus transferred a portion of his said asset, Pedro succeeded in paying D. Comprehensive tax situs by using the nationality, residence, and source
a lesser tax on the rental income derived from his property under the lower tax rules.
bracket. Pedro's action is considered/also known as:
A. Shifting C. Tax evasion
B. Tax avoidance D. None of the above
1
.Answer is (A). Statement 1 is a description of "sovereign power." Statement 2 - The power to tax is inherent. It is a
power independent of the constitution. It can be exercised even in the absence of a constitutional grant

2
.Answer is (D).
 The power of taxation can be exercised by the government only. The only inherent power which may be exercised
by public utility companies is eminent domain.
 There is no limit on the amount that may be imposed because it is based on needs of the government.

3
.Answer is (C). They exist "independent of the constitution" means, the powers can be exercised without being granted
by the constitution.

4
.Answer is (D).
 The power of taxation can be exercised by the government only. The only inherent power which may be
5
exercised by public utility companies is eminent domain.
 There is no limit on the amount that may be imposed because it is based on need
6
s of the government.

 minent domain.
 There is no limit on the amount that may be imposed because it is based on needs of the government.

 Private/Property rights
 Police Power = Private/Property rights and Liberty

7
.Answer is (A). The constitution is not the source of the three (3) inherent powers of the State, hence it can not abolish
such powers

8
.Answer is (D). There are no provisions in the constitution granting the three inherent powers of the State. However,
limitations in the exercise of those powers are provided therein.

9
.Answer is (A). "A" is the similarity between the two powers described above.

10
.Answer is (D). The power to tax, though broad in nature, is not an absolute power. It is subject to inherent as well as
constitutional limitations.

11
.Answer is (D). In the Power to Tax, the money raised by the government is based on its needs, while in the exercise
of its police power, the basis is the cost of regulation. Usefulness of the activity may also be used as a basis in
determining the amount raised under police power. The more useful the activity is, the lower is the amount of
imposition.
There is no money raised by the government in the exercise of its power of eminent domain. The government should
instead pay the property owner an amount equivalent to the fair value of such property, otherwise known as “just
compensation".

12
.Answer is (D).
Answer (A) is incorrect. Eminent domain is an inherent power, consequently, constitutional grant is not required.
Answer (B) is incorrect. The property taken in the exercised of police power is destroyed rather than preserved for
public use.
Answer (C) is incorrect. Eminent domain may be exercised by public utility companies.

13
.Answer is (D). All the 3 inherent powers of the State are legislative in application. All me 3 inherent powers interfere
with private rights and property. However, the police power of the State interferes with private/property rights and
liberty.
14
.Answer is (A). The state collects taxes from the subjects of taxation in order that it may be able to perform the
functions of government. The citizens, on the other hand, pay taxes in order that they may be secured in the enjoyment
of the benefits of organized society. This theory spawned the Doctrine of Symbiotic Relationship which means, taxes
are what we pay for a civilized society (Commissioner v. Algue).

15
.Answer is (D). The legislative branch of the LGU passed a “tax ordinance", a valid exercise of the LGU's power to tax.
However, the main purpose of the tax ordinance was not to raise revenue but to impede the progress of illegal
massage parlors, a valid exercise of police power through taxation.

16
.Answer is (D). Constitutional provisions on taxation are merely limitations in the exercise of the power of taxation by
the State. Refer also to statement "b" of #1.
Sumptuary purpose refers to non-revenue purpose, hence, no to raise fund for the government.

17
.Answer is (D). Determination of the purpose of imposition
"It is not the immediate result but the ultimate result that determines, whether the purpose is public or not. It is not the
number of persons benefited but it is the character of the purpose that determines the public character of such law.
What is not allowed is that, if it has no link to public welfare. Public purpose is determined by the use to which the tax
money is devoted. If it benefits the community in general, then it is for public purpose no matter who collects it" (Tio vs.
Videogram).

18
.Answer is (B). This is an executive function.

19
.Answer is (C). This is a legislative function

20
.Answer is (A).
Answer (B) is incorrect. . Collection is an administrative function, not legislative
Answer (C) is incorrect. Fixing of tax rate is not an administrative function
Answer (D) is incorrect. Valuation of object is an administrative function, not legislative

21
.Answer is (B). Enactment and amendment of tax laws are functions exercised not by the executive branch such as
the Commissioner of internal Revenue (CIR) but by the legislative branch of the government.

22
.Answer is (B). The power to tax in the national government is an inherent power. In contrast, the power of taxation of
the LGUs is a delegated power, granted by a provision in the Constitution.

23
.Answer is (C). The aspects of taxation levying, assessment and collection) in the national level is also applicable to
the power of taxation by the LGUS.
Levying = local legislative branch
Assessment and collection = local executive branch

24
.Answer is (B). The power to tax is not an absolute power. It is subject to inherent as well as constitutional limitations

25
.Answer is (A).
 "B" is incorrect. It is used to override the veto power of the President.
 If the tax statute is not pertaining to tax exemption, the required vote is majority of the quorum/present

26
.Answer (A is correct. Exempt from RPT: Exemption on religious, CHARITABLE and educational institutions strictly
applicable to properties that are actually, directly or exclusively used for religious, CHARITABLE or educational
purposes. Ownership in itself does not count, but rather, the fact of actual, direct and exclusive use of such property.
A non-profit hospital is a special corporation subject to a preferential rate of 10%.

27
.Answer is (A). Exempt from RPT: Exemption on religious, charitable and EDUCATIONAL institutions strictly
 applicable to properties that are actually, directly or exclusively used for religious, charitable or educational purposes.
Ownership in itself does not count but rather, the fact of actual direct and exclusive use of such property.

28
.Answer is (C). The 5,000 sq. m. leased by the religious constitution will be taxed as follows:
 The 1,000 sq. m is exempt from RPT because it is actually, directly and exclusively used for religious purposes.
 However the remaining 4000 sq. m. leased for commercial purposes is subject to RPT.

29
.Answer is (B). SOURCES (order of priority)
 Constitution
 Treaty
 Statutes or Law including judicial decisions
 Administrative rulings (i.e., revenue regulations, memorandum circular)

30
.Answer is (D). NRAs-NET are subject to proportional tax of 25% of their gross income

31
.Answer is (B). The basis for impositions of the charges above are as follows:
 Tax = Needs of the State
 Police Power = Cost of regulation and usefulness of the activity
 Toll = Cost of construction
 Custom's duty = valuation of imported goods

32
.Answer is (A). The amount collected in special assessment is not intended for public use but rather for the
maintenance of the improvements introduced by the government Only the owners of the properties subjected to special
assessment are the ones benefiting from such assessment, hence, not a tax

33
.Answer (B) refers to "global tax system"

34
.Answer is (B). Rules in case of ambiguities:
 Ambiguity in tax laws = strictly against the government, liberally in favor of the taxpayer (SAGLIT).
 Ambiguities in tax exemptions/deductions - Strictly against the taxpayer, liberally in favor of the government
(SATLIG)