TAX PRINCIPLES UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS COMPLETE STUDY GUIDE

TAX PRINCIPLES UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
COMPLETE STUDY GUIDE

●● Which of the following statements is correct?


A. The President is authorized to increase or decrease national internal
revenue tax rates.
B. One of the nature of taxation is the reciprocal duties of protection and
support between the state and subjects thereof.
C. Every sovereign government has the inherent power to tax.
D. Income tax is an indirect tax.
Answer: C. Every sovereign government has the inherent power to tax.


●● The aspects of taxation are


A. Legislative in character
B. Executive in character
C. Shared by the legislative and executive departments
D. Judicial in character
Answer: C. Shared by the legislative and executive departments

,●● Which of the inherent powers may be exercised even by public
service corporations and public entities


A. Power of taxation
B. Police power
C. Power of eminent domain
D. A and C
Answer: C. Power of eminent domain


●● 7. Which of the following statements is correct?


A. Income tax is an indirect tax.
B. Our National Internal Revenue Laws are criminal in nature.
C. The theory of taxation states that the power of taxation is supreme,
plenary, unlimited, and comprehensive.
D. Taxation is subject to inherent and constitutional limitations.
Answer: D. Taxation is subject to inherent and constitutional limitations.


●● Enforced proportional contributions from persons and property
levied by the state by virtue of its sovereignty for the support of the
government and for all public needs.


A. Toll

,B. License fee
C. Taxes
D. Assessment
Answer: C. Taxes


●● The principal purpose of taxation is


A. To encourage the growth of home industries through the proper use of
tax exemption and tax incentives
B. To implement the police power of the state
C. To reduce excessive inequalities of wealth
D. To raise revenues for government needs
Answer: D. To raise revenues for government needs


●● This is an inherent limitation on the power of taxation


A. Rule on uniformity and equity in taxation
B. Due process of law and equal protection of the laws
C. Non-impairment of the jurisdiction of the Supreme Court in tax cases
D. Tax must be for public purposes
Answer: D. Tax must be for public purposes

, ●● As to scope of the legislative power to tax, which is not correct?


A. Where there are no constitutional restrictions, and provided the
subjects are within the territorial jurisdiction of the state, Congress has
unlimited discretion as to the persons, property or occupations to be
taxed.
B. In the absence of any constitutional prohibition, Congress has the
right to levy a tax of any amount it sees fit.
C. The discretion of Congress in imposing taxes extends to the mode,
method or kind of tax, unless restricted by the constitution.
D. The sole arbiter of the purpose or which taxes shall be levied is
Congress, provided the purpose is public and the courts may not review
the levy of the tax to determine whether or not the purpose is public.
Answer: D. The sole arbiter of the purpose or which taxes shall be levied
is Congress, provided the purpose is public and the courts may not
review the levy of the tax to determine whether or not the purpose is
public.


●● Which of the following is not a determinant of the place of taxation?


A. Source of the income
B. Citizenship of the taxpayer
C. Residence of the taxpayer
D. Amount of tax to be imposed
Answer: D. Amount of tax to be imposed