Income Tax Chapter 1 Questions with
complete solution 2025
t/f A value added tax is a tax levied on the increase in value of a commodity or
service that has been created by the taxpayer's stage of the production or
distribution cycle. - correct answer ✔True
t/f Only individuals, corporations, and trusts are taxable entities for income tax
purposes - correct answer ✔False
t/f Partnerships engaged in commercial activity are taxable entities for GST
purposes. - correct answer ✔True
t/f In general, provincial taxes are based on a specified percentage of federal
taxable income - correct answer ✔False
t/f The federal government collects taxes for Ontario. - correct answer ✔false
t/f Even if the rate is the same on all transactions, it will be a higher rate on the
taxable income of lower income individuals because they spend a larger
percentage of their income - correct answer ✔True
t/f Progressive rates discourage both employment and investment, thereby
limiting economic growth. - correct answer ✔false
t/f Tax expenditures are less costly to administer than direct funding
programs. - correct answer ✔True
complete solution 2025
t/f A value added tax is a tax levied on the increase in value of a commodity or
service that has been created by the taxpayer's stage of the production or
distribution cycle. - correct answer ✔True
t/f Only individuals, corporations, and trusts are taxable entities for income tax
purposes - correct answer ✔False
t/f Partnerships engaged in commercial activity are taxable entities for GST
purposes. - correct answer ✔True
t/f In general, provincial taxes are based on a specified percentage of federal
taxable income - correct answer ✔False
t/f The federal government collects taxes for Ontario. - correct answer ✔false
t/f Even if the rate is the same on all transactions, it will be a higher rate on the
taxable income of lower income individuals because they spend a larger
percentage of their income - correct answer ✔True
t/f Progressive rates discourage both employment and investment, thereby
limiting economic growth. - correct answer ✔false
t/f Tax expenditures are less costly to administer than direct funding
programs. - correct answer ✔True
