PRINCIPLES OF TAXATION

1. A tax is invalid under the following instances, 8. In transfer taxation, John Cena, an American
except: residing in the Philippines, is taxable for his
properties situated
a. Theory of taxation and its purposes are
a. In the Philippines only
disregarded.
b. In America only
b. Basis of taxation is not recognized.
c. Both in the Philippines and abroad
c. Inherent and constitutional limitations
d. Neither in the Philippines nor in America
are not observed.
d. The canons of taxation are not observed.
9. Jenny Silang, a Filipino residing in Switzerland, is
taxable for her income derived from
2. Our tax laws are:
a. Philippines only
a. Political in nature.
b. Philippines and abroad
b. Civil in nature.
c. Abroad only
c. Penal in nature.
d. None of the above
d. Social in nature.
10. Statement 1: Imposition of taxes is a legislative
3. Statement 1: Licenses fees are usually collected
act.
as an exercise of the State’s taxing power.
Statement 2: Collection of taxes is an executive act.
Statement 2: A progressive tax is a tax, the rate of
a. Only the first statement is correct
which is directly proportional to the tax base.
b. Both statements are correct
a. True, True c. False, True
c. Only the second statement is correct
b. True, False d. False, False
d. Bothe statements are false
4. Statement 1: There can only be a specific tax
11. Statement 1: The President’s taxing power is
imposition if there is a law imposing the tax.
granted by law.
Statement 2: the power to tax cannot be exercised
Statement 2: Local government’s power to tax is
if the Constitution does not provide for it.
granted by the Constitution.
a. False, True c. False, False
a. Only the first statement is correct
b. True, True d. True, False
b. Both statements are correct
c. Only the second statement is correct
5. Which statement refers to police power as
d. Both statements are false
distinguished from taxation?
a. It is an inherent power of the state.
12. Statement 1: Public funds cannot be
b. The benefit derived is the protection
appropriated for the benefit of a religious sect.
given by the state.
Statement 2: All educational institutions are
c. It involves the taking of property.
exempt from paying taxes with regard to their
d. The amount collected is limited to the
revenues and assets actually, directly and
cost of regulation.
exclusively used for educational purposes.
a. Both statements are correct.
6. Which of the following is not considered a
b. Only the second statement is correct
national tax?
c. Both statements are false.
a. Income Tax c. Donor’s Tax
d. Only the first statement is correct.
b. Estate Tax d. Poll Tax
13. The only tax where non-payment of which will
7. Although the power to tax is inherently
not result to imprisonment:
legislative in character, it is not the function of
a. Poll tax c. Donor’s tax
Congress to
b. Excise tax d. Property tax
a. Fix with certainty the amount of taxes
b. Collect the tax levied under the law
14. What is the rule on the taxability of income that
c. Identify who should collect the tax
a government educational institution derives from
d. Determine who should be subject to the
its school operations? Such income is
tax
a. Taxed at 10% on its net taxable income
 b. Exempt from income taxation if received
by it as such
c. Subject to ordinary income taxes
d. Exempt from income taxes in the same
manner as GOCCs.

15. The head pastor of the religious sect, JCFC, as

the corporation sole, rented out a 5,000 sq. m.
registered in its name for use as school organized
for profit. The sect used the rentals for the support
and upkeep of its evangelists. The rented lot is
a. Not exempt from real property taxes
because the user is organized for profit.
b. Exempt from real property taxes because
it is actually, directly, and exclusively used
for religious purposes.
c. Not exempt from real property taxes
since it is the rents, not the land, that is
used for religious purposes.
d. Exempt from real property taxes since t
is actually, directly, and exclusively used for
educational purposes.