Exam (elaborations) TEST BANK STUDENT COPY TEST BANK INCOME TAXATION GRADE A+ QUESTION BANK 2021

1. THE PROCESS BY WHICH THE SOVEREIGN RAISES INCOME TO DEFRAY THE EXPENSES OF THE GOVERNMENT IS CALLED- (RPCPA) A. SUBSIDY B. TARIFF C. TAXATION D. TRIBUTE 2. ONE OF THE CHARACTERISTICS OF INTERNAL REVENUE TAX IS THAT THEY ARE-(RPCPA) A) CRIMINAL IN NATURE B) PENAL IN NATURE C) POLITICAL IN NATURE D) GENERALLY PROSPECTIVE IN APPLICATION 3. IN CASE OF CONFLICT BETWEEN THE TAX LAWS AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)-(RPCPA) A) BOTH TAX LAWS AND GAAP SHALL BE ENFORCED B) GAAP SHALL PREVAIL OVER TAX LAWS C) TAX LAWS SHALL PREVAIL OVER GAAP D) THE ISSUE SHALL BE RESOLVED BY THE COURT 4. WHICH OF THE FOLLOWING HAS NO POWER OF TAXATION?(RPCPA) A) PROVINCES B) CITIES C) BARANGAYS D) BARRIOS 5. “SCHEDULAR SYSTEM OF INCOME TAXATION” MEANS(RPCPA) A) ALL TYPES OF INCOME ARE ADDED TOGETHER TO ARRIVE AT GROSS INCOME B) SEPARATE GRADUATED RATES ARE IMPOSED ON DIFFERENT TYPES OF INCOME C) CAPITAL GAINS ARE EXCLUDED IN DETERMINING GROSS INCOME STUDENT COPY TEST BANK INCOME TAXATION GRADE A+ QUESTION BANK 2021 D) COMPENSATION INCOME AND BUSINESS/PROFESSIONAL INCOME ARE ADDED TOGETHER IN ARRIVING AT GROSS INCOME 6. ONE OF THE FOLLOWING IS A PRIMARY PURPOSE OF TAXATION A)PROTECTION OF LOCAL INDUSTRIES AGAINST FOREIGN COMPETITION THROUGH IMPOSITION OF HIGH CUSTOMS DUTIES ON IMPORTED GOODS B)REDUCTION OF INEQUALITIES IN WEALTH AND INCOME BY IMPOSING PROGRESSIVELY HIGHER TAX RATES C) TO SECURE REVENUE FOR THE SUPPORT OF THE GOVERNMENT D) STRENGTHENING OF ANEMIC ENTERPRISES BY GIVING TAX EXEMPTION 7. WHICH OF THE FOLLOWING IS NOT A SECONDARY PURPOSE OF TAXATION? A) TO SERVE AS KEY INSTRUMENT OF SOCIAL CONTROL B) TO EFFECT A MORE EQUITABLE DISTRIB UTION OF WEALTH AMONG PEOPLE C) TO ACHIEVE SOCIAL AND ECONOMIC STABILITY D) TO RAISE REVENUE TO DEFRAY THE NECESSARY EXPENSE OF THE GOVERNMENT 8. WHICH IS THE BEST ANSWER? A TAX REFORM AT ANY GIVEN TIME UNDERSCORES THE FACT THAT-(RPCPA) A) TAXATION IS AN INHERENT POWER OF THE STATE B) TAXATION IS ESSENTIALLY A LEGISLATIVE POWER C) TAXATION IS A POWER THAT IS VERY BROAD D) THE STATE CAN AND SHOULD ADOPT PROGRESSIVE TAXATION 9. THE LEGISLATIVE BODY CAN IMPOSE A TAX AT ANY AMOUNT UNDERSCORES THE LEGAL DICTUM THAT TAXATION IS –(RPCPA) A) AN INHERENT POWER OF THE TAX B) A VERY BROAD POWER OF THE STATE C) ESSENTIALLY A LEGISLATIVE POWER D) FOR PUBLIC PURPOSE 10. ALL OF THE FOLLOWING, EXCEPT ONE, ARE BASIC PRINCIPLES OF THE SOUND TAX SYSTEM A) FISCAL ADEQUACY B) THEORETICAL JUSTICE C) ADMINISTRATIVE FEASIBILITY D) INHERENT IN SOVEREIGNTY 11. UNDER THIS BASIC PRINCIPLE OF SOUND TAX SYSTEM, THE GOVERNMENT SHOULD NOT INCUR A DEFICIT-(RPCPA) A) THEORETICAL JUSTICE B) ADMINISTRATIVE FEASIBILITY C) FISCAL ADEQUACY D) NONE OF THE ABOVE 12. THE FOLLOWING, EXCEPT ONE, ARE BASIC PRINCIPLES OF A SOUND TAX SYSTEM A) IT SHOULD BE CAPABLE OF BEING EFFECTIVELY ENFORCED B) IT MUST BE PROGRESSIVE C) SOURCES OF REVENUE MUST BE SUFFICIENT TO MEET GOVERNMENT EXPENDITURES AND OTHER PUBLIC NEEDS D) IT SHOULD BE EXERCISED TO PROMOTE PUBLIC WELFARE 13. WHICH OF THE FOLLOWING IS NOT ONE OF THE CANONS OF A SOUND TAX SYSTEM? A) QUANTIFIABILITY B) EQUALITY C) CERTAINTY D) CONVENIENCE 14. THE POWER OF TAXATION CAN ONLY BE EXERCISED BY THE LAWMAKING BODY A) SUBJECT TO CONSTITUTIONAL AND INHERENT LIMITATIONS B) EQUALITY OR THEORETICAL JUSTICE C) LEGISLATIVE IN CHARACTER D) INHERENT IN SOVEREIGNTY 15. THE PRESIDENT OF THE PHILIPPINES AND THE PRIME MINISTER OF JAPAN ENTERED INTO AN EXECUTIVE AGREEMENTIN RESPECT OF A LOAN FACILITY TO THE PHILIPPINES FROM JAPAN WHEREBY IT WAS STIPULATED THAT INTEREST ON LOANS GRANTED BY PRIVATE JAPANESE FINANCIAL INSTITUTIONS IN THE PHILIPPINES SHALL NOT BE SUBJECT TO PHILIPPINE INCOME TAXES. WHAT BASIC CHARACTERISTIC OF TAXATION HAS BEEN VIOLATED BY THIS AGREEMENT? A) INHERENT LIMITATION B) THEORETICAL JUSTICE C) LEGISLATIVE IN CHARACTER D) ADMINISTRATIVE FEASIBILITY 16. WHICH STATEMENT GIVES THE CORRECT ANSWER? THAT A FEASIBILITY STUDY NEEDS OR NEED TO LOOK INTO THE TAXES OF DIFFERENT POLITICAL SUBDIVISIONS OF GOVERNMENT WHICH MAY BE ALTERNATIVE SITES OF BUSINESS BECAUSE-(RPCPA) A) PROVINCES, CITIES AND MUNICIPALITIES MUST HAVE UNIFORM TAXES BETWEEN AND AMONG THEMSELVES B) THE LOCAL TAXES OF A POLITICAL SUBDIVISION NEED NOT BE UNIFORM WITH THE LOCAL TAXES OF ANOTHER POLITICAL SUBDIVISION C) BUSINESSES THAT ARE SUBJECT TO NATIONAL TAXES ARE EXEMPTED FROM LOCAL BUSINESS TAXES D) LOCAL BUSINESS TAXES MAY BE CREDITED AGAINST NATIONAL BUSINESS TAXES 17. STATE,MENT 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 LAWMAKING.-(RPCPA) A) FALSE, FALSE B) FALSE, TRUE C) TRUE, TRUE D) TRUE, FALSE 18. THOSE RESTRICTIONS ON THE EXERCISE OF THE POWER OF TAXATION THAT AREW FOUND IN THE CONSTITUTION OR IMPLIED FROM ITS PROVISIONS A) THEORETICAL JUSTICE B) LEGISLATIVE IN CHARACTER C) INHERENT LIMITATIONS D) CONSTITUTIONAL LIMITATIONS 19. WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?-(RPCPA) A) TAXES MAY BE IMPOSED TO RAISE REVENUE OR TO PROVIDE DISINCENTIVES TO CERTAIN ACTIVITIES WITHIN THE STATE B) THE STATE CAN HAVE THE POWER OF TAXATION EVEN IF THE CONSTITUTION DOES NOT NECESSARILY GIVE IT THE POWER TO TAX C) FOR THE EXERCISE OF THE POWER OF TAXATION, THE STATE CANJ TAX ANYTHING AT ANY TIME D) THE POWER OF TAXATION IN THE PHILIPPINE CONSTITUTION ARE GRANTS OF POWER AND NOT LIMITATIONS ON TAXING POWERS 20. ONE OF THE FOLLOWING IS NOT AN INHERENT LIMITATION ON THE EXERCISE OF THE POWER OF TAXATION- A) INTERNATIONAL COMITY B) DOUBLE TAXATION C) NON-DELEGATION OF THE LEGISLATIVE POWER TO TAX D) TERRITORIALITY 21. THE CITY COUNCIL PASSED AN ORDINANCE IMPOSING AN OCCUPATION TAX ON AN AIRCONDITIONING TECHNICIAN. CONDE IS THE ONLY PERSON WITH SUCH OCCUPATION IN THE CITY. HE CHALLENGED THE VALIDITY OF THE ORDINANCE AS BEING DISCRIMINATORY SINCE HE IS THE ONLY ONE ADVERSELY AFFECTED. A) THE CONTENTION OF CONDE IS TENABLE B) THE ORDINANCE IS UNCONSTITUTIONAL BECAUSE CONDE IS DENIED OF HIS RIGHT TO EQUAL PROTECTION OF LAW C) THE CONTENTION OF CONDE IS NOT JUSTIFIED BECAUSE THE RULE ON UNIFORMITY IS NOT VIOLATED CONSIDERING THAT THE ORDINANCE WOULD ALSO IMPOSE ON ALL AIRCONDITIONING TECHNICIAN WHO MAY COME WITHIN THE JURISDICTION OF THE CITY D) THE ISSUE ON VALIDITY OR INVALIDITY OF THE ORDINANCE SHOULD BE SET ASIDE 22. TREATING PERSONS WHO ARE SIMILARLY SITUATED IN THE SAME MANNER- A) UNIFORMITY OF TAXATION