1.

The existence of a Constitution is a necessary for the exercise of the inherent powers of True
the Sovereign State. 14. Incomes derived from unlawful activities are taxable income.
False True

2. All government entities regardless of their functions are exempted from taxes because it 15. Taxation is considered as the lifeblood of the government and every government unit
would be impractical for their government to be taxing itself. must exercise this power.
False False

3. Taxation could be described as power, as a process or as a means. As a power, taxation is 16. Gross income includes all income from whatever sources whether legal or illegal source.
a way of apportioning the cost of government among those who are privileged to enjoy its True
benefits. 17. Taxation is the government's legitimate means of interfering with the private properties
False of its subjects.
True
4. The state can enforce contributions upon its citizens in the form of taxes even without a
constitutional provision authorizing it. 18. Taxation is the primary source of government revenue. Hence, all government funds
True come from taxes.
False
5. No law granting any tax exemption shall be passed without the concurrence of two-thirds
of the members of the Congress. 19. Sovereign quality dictates that a nation cannot impose taxes on the property of another
False country.
True
6. If the taxpayer has no accounting records or the other documents, the tax assessment is
based on the best evidence obtainable. 20. The amount of taxes may be increased to curve spending power and minimize inflation.
True True

7. A tax evader sidesteps the law, while the tax avoider breaks it. 21. The benefits from taxation have to be experienced to justify the legitimacy of collection
False of taxes from the people.
False
8. Tax assessment is an action of actual tax collection.
False 22. The State can still exercise its taxing power over its citizens, even if he resides outside
the taxing State's territory.
9. Sovereign quality dictates that a nation cannot impose taxes on the property of another True
country.
True 23. Revenues derived from taxes cannot be used for exclusive use of private persons.
True
10. Appropriation of taxes is considered valid of intended for the common good of the
people without identifying a particular person to be benefited from it. 24. Taxation is separable in the existence of a nation.
True False

11. Taxes may be exercised to encourage economic growth by granting tax exemptions. 25. The Constitution is the source of the State's taxing power.
True False

12. The State can still exercise its taxing power over its citizens, even if he resides outside 26. Taxation is considered as the lifeblood of the government and every government unit
the taxing State's territory. must exercise this power.
True False - Not for every government, but it is exclusively for legislative

13. Jeopardy assessment requires no tax audit and shortens the taxpayer's period.
27. The examples of eminent domain are the following preservation of natural resources 40. The following are the examples of inherent limitations: taxes may be levied only for
and regulations of various professions. public purposes, taxation is subject to international comity and non-impairment of
True contracts.
28. The amount of taxes may be increased to curve spending power and minimize inflation. False
True
41. Regulate inflation, achieve economic and social stability and serve as key instrument for
29. Taxes collected by the BIR are local taxes. social control are the objectives of compensatory purpose.
False False

30. Protection is the basic consideration that justify tax situs. 42. In tax condonation, the government has the option to restore what has already been
True taken from the taxpayer.
True
31. In its strict sense, the power to make tax laws can be delegated to other branches of the
government. 43. Taxation is a power emanating from necessity to preserve the private interest.
False False - to preserve the State's sovereignty

32. Revenue purpose, also known as Sumptuary. 44. In general, bills need to be signed by the President to become a law.
False False - Congress/Senate and then to the President

33. Revenues derived from taxes cannot be used for exclusive use of private persons. 45. Taxation power, generally has no limit.
True True

34. The following are the examples of intangible properties, stocks, goodwill, franchise, 46. The importance of police power is for the protection, safety and welfare of society.
coins and paper bills. True
True
35. In the absence of limitations provided by the Constitution, the power to tax is limited in 47. All inherent powers are subject to Constitutional and Inherent limitations.
its range, complete (plenary), with wide extent of application (comprehensive) and with False
highest degree (supreme).
False 48. Tax Avoidance, also called as Tax dodging.
False
36. Inherent limitations are the natural restrictions to safeguard and ensure that the power
of taxation shall be exercised by the government and other agencies for the betterment of 49. Direct taxes are transferable.
the people whose interest should be served, enhanced and protected. False
False
50. Tax administration involves legislation and collection of taxes.
37. Assessment involves the act of compliance by the taxpayer in contributing his share to True
defray the expenses of the government. 51. The Philippine Internal Revenue laws are generally political and penal in nature.
No correct answers False

38. All aspects of taxation can be delegated since they are administrative in nature. 52. The principle of "retrospective application of tax laws" states that a tax bill must only be
False applicable and operative after becoming a law.
False
39. A tax may be levied for the support of religious activities as long as all churches benefit
from it. 53. The applications of fiscal adequacy are the collection of taxes at source, assigning of
False duly authorized banks to collect taxes and electronic filing of tax returns.
False
54. The tax situs for occupation is the place where occupation is pursued even if the
criterion for nationality is given. 6. Tips are not taxable. *
True False

7. In general, illegally obtained income is taxable. *

55. Among the executive officials of the government, only the CIR has the power to True
interpret the provisions of NIRC and the other tax laws.
True 8. Amounts received by reason of involuntary separation remain exempt from income tax
even if the official or the employee, at the time of separation, had rendered less than ten
56. The principle of theoretical justice states that the tax burden must be proportionate to (10) years of service and/or below 50 years of age. *
the taxpayer's ability to pay. True
True
9. The creditor forgives the indebtedness of the debtor without any consideration is
57. Appropriation of taxes is considered valid if intended for the common good of the considered as compensation income.
people without identifying a particular person to be benefited from it. False
···
10. Interest income earned by the borrowers from the banks is subject to final tax of 20%. *
58. Local taxes ordinances must be uniformly and equally applied throughout the country. True
False - different taxes on different places or regions
11. The entire amount of P90,000 fourteenth month pay is nontaxable. *
59. Taxes may be used as a tool and weapon in international relations and to protect trade True
relations.
True 12. The law imposes a tax on income from whatever source which means that it includes
income coming from legal source.
60. In tax capitalization, the buyer absorbs the payment of tax and includes same as part of ···
the cost of the acquired property. 13. The excess of actual expenses over advances made shall constitute taxable income if
True such amount is not returned to the employer.
True
1. In general, prizes are subject to final tax of 25% except if the amount of the prize is ten
thousand (P10,000) or less which shall be subjected to normal tax. * 14. Interest income on time deposit is taxable. *
False True

2. One of the items of gross compensation is the partners' distributive share from the net 15. The imposes a tax on income from whatever source which means that it includes
income of general professional partnership. * whether coming from legal and illegal sources. *
False True

3. The tax laws cannot apply to the property of foreign governments is an example of 16. Taxes are important because they are the lifeblood of the government and so should be
inherent limitation on the power calculated without unnecessary hindrance. *
True True

4. A 25% surcharge shall be collected if there is willful neglect on the taxpayer who files only 17. Cash and property dividends shall be taxable upon declaration. *
after prior notice of the BIR. True
···
18. Cost of living allowance is not part of taxable compensation income because the amount
5. A stock dividend constitutes income if it gives the shareholder an interest different from is very minimal. *
that which his former stock holdings represented. * False
True
19. Tips or gratuities paid directly to an employee (by a customer of the employer) are
considered taxable income, but subject to withholding tax. *
False

20. The legislature, in adopting measures to implement our tax laws wants to be assured
that taxes are paid and collected without delay. *
True
21. As a rule, recoveries of damages representing for loss of profit or income are taxable. *
True 1. Any commercial activity engaged in as a means of livelihood or profit of an individual or
group of individuals.
22. A change in the method of accounting requires or not requires the approval of the a) Profession
Commissioner of Internal Revenue. b) Business
False c) Cost of sales
d) Gross income
23. Insurance premiums constitute taxable income on the basis of the amount of premium
paid. * 2. A lump sum payment received by an employee who has served a company for a
True considerable period of time and has decided to withdraw from work into privacy. *
a) hazard or emergency pay
24. In police power, the property is taken preserved for public use. * b) tips and gratuities
False c) retirement pay
d) pensions

25. All BIR approved retirement pays are exempt from income tax. * 3. Which of the following is a taxable compensation income? *
False a) Separation pay due to resignation
b) Retirement pay under BIR approved retirement plan
c) Separation pay due to disability
26. The exercise of the power of eminent domain and police power can be expressly
d) Terminal pay by fact of death.
delegated to the local government units by the law making body.
True
4. It refers to earnings derived from leasing real estate as well as personal property.
a) Rental Income
27. If a corporation forgives the debt of its stockholder, the transaction is considered
b) Interest Income
payment of income. *
c) Dividend Income
True
d) Insurance Premium
28. Indirect double taxation is legal as long as there is no violation of equal protection and
5. Who makes revenue regulations? *
uniformity clauses of the Constitution.
a) House of representatives
True
b) BIR Commissioner
c) Board of Accountancy
29. When income is received under a mistake of fact or law, the income is included in the
d) Secretary of Finance
gross taxable income of the receiver notwithstanding the fact that the receiver may be
required to return the income item to the payor when the error is discovered. *
6. Compensation income is earned when an employer-employee relationship exists. Which
True
of the following does not represent compensation income? *
a) Honorarium of the company lawyer as a speaker in a company sponsored seminar
30. The power of taxation and police power may be exercised simultaneously. *
b) Retainer's fee of a bookkeeper
True
c) Emergency pay
d) Sick leave with pay

7. The following are examples of income from illegal sources, except *

a) Smuggling 14. It refers to premium payment received for working beyond regular hours of work which
b) Extortion is included in the computation of gross salary of employee. *
c) Rebates a) Profit sharing
d) Gambling b) Fringe benefits and de minimis
c) Overtime pay
d) Hazard pay and emergency pay

8. Which one of the following cases may be taxable income be computed not on the basis 15. When a company is at the brink of bankruptcy, the sequence of satisfying the company's
of the calendar? * indebtedness should be in this order
a) Taxpayer has no accounting period. a) BIR, Creditors, Employee
b) Taxpayer does not keep books of accounts. b) Creditors, BIR, Employee
c) Taxpayer is an individual taxpayer. c) Employee, BIR, Creditors
d) Taxpayer is a corporation d) BIR, Employee, Creditors

9. Director's fee of the company is an example of * 16. An amount received by an injured person as payment for loss income or payment to
a) Honoraria compensate damage to property, injury to person, or loss of life. *
b) Fees a) Annuities
c) Commissions b) Embezzled funds
d) Tips and gratuities c) Illegally Obtained Income
d) Damages recoveries
10. The following are kinds of dividend income, except *
a) Cash dividends 17. Our internal revenue laws are *
b) Liquidating dividends a) Political in nature
c) Scrip dividends b) Penal in nature
d) Property dividends c) Criminal in nature
d) Civil in nature
11. An accounting period of twelve (12) months ending on the last day of December. *
a) Sum-of-the-year 18. The power of taxation proceeds upon what theory? *
b) Leap year a) Necessity theory
c) Calendar year b) Ability to pay
d) Fiscal year c) Benefits received theory
d) Severance Test
12. A stated allowance paid regularly to a person on his retirement or to his dependents on
his death, in consideration of past services, meritorious work, age, loss, or injury. 19. An additional payment received due to worker's exposure to danger or harm while
a) Overtime pay working. *
b) Prizes and winnings a) Honoraria
c) Retirement pay b) Emergency pay
d) Pensions c) Retirement pay
d) Pensions
13. These benefits are relatively small value and they are not considered compensation
subject to income tax. * 20. One of the following is not an example of constructive receipt of income: *
a) Fringe benefits a) Partners' distributive share in the profit of a partnership.
b) 13th month pay and other benefits of P90,000 b) Interest credited to the account of a taxpayer and which may be drawn upon by him
c) Minimum wage at anytime.
d) De minimis c) Interest coupons which have matured.
d) Corporation contingently credited stock bonus, but the stock is not available to the
employee until some future date.
 28. A contract whereby the taxpayer and the government by reciprocal concessions avoid a
litigation or put an end to one already commenced. *
21. These are payments given in recognition for services performed for which established a) Confiscation
practice discourages charging a fixed fee. * b) Compromise
a) Salary or wages c) Distraint
b) Honoraria d) Suspension
c) Fixed or variable allowances
d) Hazard or emergency pay 29. A payment or portion of proceeds paid to the owner of a right, such as an oil right or a
22. Which of the following is not a compensation income? * patent for the if it or a portion of the proceeds from the work of an author or composer. *
a) Retirement pay a) Goodwill
b) Professional fees b) Trademark
c) Allowances c) Royalty
d) Wages d) Franchise

23. Which of the following is taxable? * 30. Which of the following inherent powers maybe exercised even by public utility
a) SSS and GSIS benefit companies? *
b) Social security benefit received by a balikbayan from employer abroad. a) Taxation
c) Separation pay received by a 50-year old employee due to retrenchment program of b) Eminent domain
the employer. c) Police power
d) Interest income on deposit. d) Choices A and B

24. Compensation in a form of shares of stock should be valued 31. John is one of the board of directors of XYZ Company. During the current taxable year,
a) At cost John received director's fees amounting to P100,000 from quarterly board meetings he
b) At acquisition price attended. Such fees should *
c) At fair market value a) Form part of John's gross compensation income even if he is not employee.
d) At par value b) Form part of John's gross compensation income only if he is at the same time an
employee of the corporation.
25. The tax code defines "as a means of any good, service, or other benefits furnished or c) Choices 1 and 2
granted by an employer, in cash or in kind, in addition to basic salaries of an individual d) Neither of the choices given
employee.
a) Thirteenth month pay and other benefits 32. Examples of involuntary separation are the following, except *
b) Fringe benefits and de minimis a) Reorganization/merger of company
c) Awards for special services b) Resignation from the company because of being hired by other company.
d) Overtime pay c) Company at the brink of bankruptcy
d) Disability and Sickness
26. A written notice and demand by the BIR on the taxpayer for the settlement of a due tax
liability that there is definitely set and fixed. * 33. Minimum wage earners (MWE) receiving "other benefits" exceeding the P90,000 limit
a) Assessment shall be
b) Forfeiture a) Taxable on the excess benefits only.
c) Audit engagement letter b) Taxable on the excess benefits as well as his salaries, wages and allowances, just like
d) Institution of criminal action an employee receiving compensation income beyond the statutory minimum wage.
c) None of the above.
27. Which of the following will result to earning of income by the debtor? *
a) Cancellation of existing payable without financial consideration 34. Which accounting method is used when income or expenses are recognized regardless
b) Cancellation of existing payables for services rendered to creditor of related collection or payment? *
c) Cancellation of existing payable to offset the equivalent amount of collectible a) Cash method
d) Cancellation of existing payable due to bankruptcy of the debtor b) Accrual method
c) Hybrid method
d) Installment method d) Tips and gratuities

35. The following are examples of intangible assets, except * 43. Which of the following is considered as taxable compensation income? *
a) Secrets processes and formulas a) Free housing given to employee
b) Paintings b) Social Security System Benefits
c) Cash in bank c) Retirement pay under a duly BIR approved benefit plan
d) Lease rights d) Retrenchment pay
36. Which of the following compensation income is taxable? * 44. Which of the following is taxable?
a) Fixed/variable allowances subject to liquidation by the employee. a) Separation pay received by a 50-year old employee due to the retrenchment program
b) De minimis monetized vacation leave. of the employer.
c) Separation pay given where separation from employment is beyond the control of b) Retirement pay received from a benefit plan registered with the BIR where at the
the employer. time the employee retired, he was 57 years of age, retiring from employment for the
d) Board and lodging granted for the convenience of the employer. first time in his life, and was employed with the employer for 8 years.
c) Social security benefit received by a balikbayan from employer abroad at age of 30.
37. The following are the requisites of the retirement pay are not taxable, except * d) None of the choices.
a) The retirement program is approved by the BIR Commissioner.
b) It should have been availed for the second time. 45. It is usually a percentage of total sales or on certain quota of sales volume attained as
c) The retiree should have been employed for 12 years in the said company. part of incentive. *
d) The retiree should have been 51 years old at the time of retirement. a) Emergency pay
b) Commission
38. Raising revenue is the primary purpose of taxation, which of the following is not one of c) Tips and gratuities
the secondary purposes of taxation. * d) Honoraria
a) Reduction of social inequality
b) Encourage economic growth by granting incentives and exemptions 46. A civil penalty of 50% of the basic tax is imposed in case of
c) Promotion of general welfare a) Failure to file the return on time.
d) Protection of foreign interests b) Filing the return with unauthorized revenue officer.
c) Willful neglect to file the return on time.
39. The following are examples of nontaxable compensation for injuries, except * d) Failure to pay the deficiency tax within the time prescribed for payment.
a) Actual damages for injuries suffered.
b) Compensatory damages for unrealized profits. 47. The power to regulate liberty and property to promote the general welfare: *
c) Moral damages for grief, anxiety and physical sufferings. a) Taxation
d) Exemplary damages b) Police power
c) Eminent domain
40. If an individual performs services for a creditor who in consideration thereof cancels the d) Power of recall
debt, the cancellation of indebtedness may amount *
a) To a gift 48. In which of the following cases where the civil penalties of 25% or 50% imposed by the
b) To a capital contribution Tax Code is not applicable?
c) To a payment of income a) In case a false or fraudulent return is willfully made.
41. If a property is received in lieu of cash compensation, the basis of tax is the * b) Failure to pay the full amount of tax shown on any return required to be filed under
a) supposed amount of cash to be received the law.
b) agreed value of the property received c) Failure to file certain information required by the tax code.
c) fair market value of the property received d) Failure or willful neglect to file the tax return within the period prescribed by law.
d) salvage value of the property received.
49. Which of the following is a taxable compensation income?
42. A payment made to the emcees' of a convention event is an example of * a) Professional fee, net of creditable withholding tax
a) Honoraria b) Separation pay due to closure of the employer's business
b) Fees c) Terminal pay inclusive of P15,000 13th month pay
c) Salary and wage d) Separation pay due to early retirement
 D. Supreme Court Justice
50. Which of the following instances may give rise to short accounting period? *
a) When the corporation is newly organized using calendar year. 7. A formal statement prepared by the individual taxpayer or his agent showing the
b) When a corporation is dissolved. following information like taxable amounts and description of taxable transactions,
c) When a corporation changes accounting period. allowable deductions, amount of tax and tax payable to the government.
d) All of the above. A. Tax Remedies
B. Tax Assessment
1. Which of the following is not among the administrative powers of the Bureau of internal C. Tax Returns
Revenue? D. Tax Administration
A. Compromise tax assessments.
B. Distraint of personal property of delinquent taxpayer. 8. A formal letter made the BIR demanding the taxpayer to settle his tax obligations within
C. Render court decision concerning tax dispute. the date prescribed.
D. Levy of real property of delinquent taxpayer. A. Tax Administration
B. Tax Returns
2. An assessment without completing tax audit which is intended to facilitate the collection C. Tax Assesssment
of taxes due to taxpayer's noncooperation. D. Tax Remedies
A. Jeopardy assessment
B. Deficiency assessment 9. An assessment whereby the taxpayer is questioning the validity or legality of the Formal
C. Disputed assessment Letter of Demand.
D. Void assessment A. Deficiency Assessment
B. Final Assessment
3. An agency responsible for the assessing and collecting all taxes and charges imposed by C. Disputed Assessment
the NIRC, other tax laws and regulations. D. Jeopardy Assessment
A. Bureau of Internal Revenue
B. Bureau of Customs and Tariff Commission 10. Which of the following statements is correct?
C. Land Transportation Office A. By nature, the government's power to impose taxes carries with it the power to enforce
D. Department of Finance contribution.
4. Which of the statements is incorrect? B. As the lifeblood of the government, taxes are optional and the taxpayer thereof must
A. The Bureau of Customs tasked to enforced the Tariff and Customs Code. make payment promptly.
B. The Bureau of Internal Revenue is primarily in charge to assess and collect taxes and C. The law protects the taxpayer against abuses of tax collection by requiring tax collectors
charges imposed by the NIRC, other tax laws and regulations. to reasonably exercise the process in accordance with the prescribed procedure.
C. The Department of Finance is responsible for the fiscal policies and general management D. The government has the authority to devise ways and means to accomplish tax collection
of the Philippine Government's financial resources. in the most effective manner.
D. The Land Transportation office is responsible for the collection of taxes on imports.
11. It is a scheme of reducing payment of taxes through legally permissible means.
5. The following are the powers and duties of the Bureau of Internal Revenue, EXCEPT A. Tax amnesty
A. To assess and collect all local internal revenue taxes, fees and charges. B. Tax remission
B. To enforce all forfeitures, penalties and fines of national taxes. C. Tax avoidance
C. To execute judgments in all cases decided in its favor by the Court of Tax Appeals and the D. Tax evasion
ordinary courts.
D. To administer, supervise and effect police powers authorized by the NIRC. 12. This refers to the process of taxation to determine the amount of tax based on existing
tax law.
6. It has the power to decide disputed assessments, refund of internal revenue taxes, fees A. Levying
or other charges, penalties imposed arising under the Tax Code or other tax laws, subject to B. Collection
the exclusive appellate jurisdiction of the Court of Tax Appeals. C. Assessment
A. Finance Secretary D. Imposition
B. Court of Appeals
C. BIR Commissioner 13. Which of the following statements is not correct?
A. The Secretary of Finance is vested with authority to revoke, repeal pr abrogate acts or C. Surcharge
previous rulings of his predecessors in office because these are not binding on their D. Delinquency
successors.
B. Regulations and administrative rules usually implement tax laws. 20. The following are examples of simple neglect, except.
C. The Chief legal officer of the government may give memorandum concerning tax issues. A. Fails to pay the deficiency tax within the time prescribed for its payment in the notice of
D. Executive orders are regulations issued by the Congress for the purpose of interpreting, assessment.
implementing, or giving administrative effect to a provision of the Constitution. B. Fails to file any return and pay the tax due on the date prescribed.
14. The following are the constitutional limitations on the power of taxation, except C. Fails to file the return intentionally with the period prescribed by the Tax Code or by
A. taxes are not subject to set-off or compensation rules and regulations.
B. only Congress can exercise the power of taxation D.Files income returns with an internal revenue officer other than with whom the return is
C. non-impairment of the obligation of contracts required to be filed.
D. the rule of taxation must be uniform
21. The tax surcharges imposed on willful neglect.
15. All of the following statements are correct except one. A. 10%
A. Tax burdens shall either be imposed nor presumed beyond what the statutes expressly B. 25%
and clearly state because tax statutes should be construed strictly against the C. 50%
government. D. 75%
B. When there is ambiguity of tax laws, the rules of statutory construction may be used to
search for the legislative intent. 22. The due date prescribed by laws for filing of return and payment of taxes on income tax
C. When the primary consideration is the legislative intent but doubts exist in determining (taxpayer is employee)
such intent, the doubts must be resolved liberally in favor of taxpayers, and strictly against A. April 15 of the same year
the taxing authority since tax laws impose special burden upon the taxpayer. B. April 15 preceding year
D. A tax statute must be applicable and operative only upon becoming a law. C. April 15 succeeding year
D. None of the choices given
16. These refers to the rules or orders having force of law issued by the executive branch of
the government to ensure uniform application of the tax law.
23. Any person convicted of crime penalized by this Code shall, in addition to being liable for
A. Local tax ordinances
the payment of the tax, be subject to the penalties imposed herein as follows. Which of the
B. Memorandum orders
statements is incorrect?
C. BIR Rulings
A. If the offender is a foreigner, she/he shall be deported immediately before serving the
D. Revenue Regulations
sentence without further proceedings of deportion.
B. In the case of associations, partnerships or corporations, the penalty shall be imposed on
17. Which of the following statements is not correct? the partner, president, general manager, branch manager, treasurer, officer-in-charge and
A. Collections from taxes are public money. employees responsible for the violation.
B. Appropriation of taxes for the common good of the people is valid. C. If the offender is a CPA, his CPA license shall be automatically revoked or cancelled upon
C. Construction of private road from taxes is a valid appropriation. conviction.
D. Allocation of taxes for the benefit of greater portion of population is considered for D. If the offender is a public officer or employee, the maximum penalty prescribed for the
public purposes. offense shall be imposed.
Other:
18. The following are the principles of a sound tax system, except one.
A. Theoretical justice 24. Tax administration is a system involving enforcement of taxes through the use of
B. Administrative feasibility A. tax legislation
C. Revenue purpose B. tax imposition and collection
D. Fiscal Adequacy C. tax assessment and collection
D. tax legislation and assessment
19. A civil penalty imposed by law in addition to the main tax required to be paid due to
delinquency or misrepresentation of taxes. 25. A governmental agency responsible for the fiscal policies and management of the
A. Misrepresentation government's financial resources.
B. Deficiency A. Department of Public, Works and Highways
B. Department of Health B. Theoretical justice
C. Department of Finance C. Administrative feasibility
D. Department of Education D. Due process of law

33. To spread the burden of taxation, the corresponding estimated tax is collected at once
26. The seized property of a delinquent taxpayer becomes the property of the government. every payroll period so that at the end of taxable year, the amount of tax withheld will be
This refers to equal or approximate to the actual tax for the year. This taxation system of collection at
A. Distraint source is based on what tax principle?
B. Levy A. Fiscal adequacy
C. Forfeiture B. Theoretical justice
D. Compromise C. Administrative feasibility
D. Due process of law
27. In case of deductions and exemptions on income tax returns, doubts shall be resolved
A. liberally in favor of the taxpayer 34. All of the following are inherent restrictions on the exercise on taxation power, except
B. strictly against the government A. rule of uniformity
C. strictly against the taxpayer B. for public purposes
D. with compromise C. territorial jurisdiction
D. international comity
28. In case of conflict between the tax laws and generally accepted accounting principles
(GAAP) for preparation of tax returns, 35. Which of the following nature of laws describes tax laws?
A. GAAp shall prevails over tax law. A. remedial
B. Tax laws shall prevail over GAAP. B. political
C. The courts shall resolve the issue. C. criminal
D. Both tax laws and GAAP shall be enforced. D. civil

29. The following are the characteristics of taxes, except 36. An inherent power of the sovereign state founded on the idea that the common
A. Voluntary contribution necessities and interests of the community transcend individual rights in property.
B. Imposed by legislative body A. Police power
C. Proportionate in character B. Eminent power
D. Used for public purpose C. Taxation power
D. Sovereign power
30. All of the following are National taxes as to collecting authority except
A. Value-added tax 37. The following are the similarities among Taxation, Eminent Domain and Police Power,
B. other percentage tax except
C. excise tax A. They are all legislative in nature and character.
D. real property tax B. They presuppose an equivalent compensation.
C. They are all necessary attributes of sovereignty because there can be no effective
31. A fundamental rule in taxation is that the property of one country may not be taxed by government without them.
another country. This is known as D. None of the choices given
A. International inhibition
B. Reciprocity 38. An inherent power of the sovereign state to legislate for the protection of health,
C. International Comity welfare and morals of the community.
D. International law A. Police power
B. Eminent power
32. The statement that "he who received more should give more" is based on this basic tax C. Taxation power
principle. D. None of the choices given
A. Fiscal adequacy
39. It is considered as the strongest among the inherent powers of the government. B. Imprescriptibility of taxes
A. Police power C. Double taxation
B. Eminent power D. Equitable recoupment
C. Taxation power
D. All of the above.
40. Also known as Sumptuary, a secondary objective of imposing tax. 47. Under this method, the taxpayer uses illegal or unlawful means to defeat, evade or
A. Revenue purpose lessen the payment of tax.
B. Regulatory purpose A. Tax Dodging
C. Compensatory purpose B. Tax Avoidance
D. Public purpose C. Tax Minimization
41. An example of compensatory purpose D. Tax Option
A. An excise tax on gasoline consumed is imposed on vehicle owners using roads.
B. Regulate inflation 48. This tax doctrine is based on the Marshall Dictum.
C. Public purpose A. Power to Build
D. Achieve economic and social stability B. Power to Destroy
C. Situs of Taxation
42. It shall have the power to review, revise, reverse, modify or affirm on appeal, as the laws D. Compromises
or the Rules of Court may provide, final judgments and orders of lower courts in all cases
involving legality of any tax, impost, assessment, or toll or any penalty imposed in relation 49. Fees or charges imposed on imported goods brought into the country to protect local
thereto. industry.
A. BIR Commissioner A. Subsidy
B. Finance Secretary B. Customs duties
C. Supreme Court C. License fee
D. Congress D. Toll

43. An act of administration and implementation of the tax laws by the executive through 50. A contribution enforced by the government primarily to restrain and regulate business
its administrative agencies such as the BIR or Bureau Customs. or occupation.
A. Assessment A. Customs duties
B. Payment of tax B. Subsidy
C. Levy or Imposition of tax C. License fee
D. Fiscal adequacy D. Toll

44. The following items are under the function of the legislative department, except
A. Define object of tax
B. Fix tax rates
C. Collection of taxes
D. Penalty for violations

45. The following are the applications of administrative feasibility, except.

A. Collection of taxes at source
B. Assigning of duly authorized banks to collect taxes.
C. Electronic filing of tax returns
D. None of the above

46. An act of the sovereign by taxing twice for the same purpose in the same year upon the
same property or activity of the same person, when it should be taxed once, for the same
purpose and with the same kind of character of tax.
A. Escape from taxation