TAX2601 Assignment 1 Semester 2|COMPLETE
ANSWERS & CLEAR WORKINGS| - DUE 10
September 2025
____________________________________________________________________________________
QUESTIONS AND CORRECT ANSWERS
Which of the following is a nature of taxation?
A. The power is exercised by legislative action
B. It is essentially an administrative function
C. It is generally payable in money
D. The state can exist without it
✓ The power is exercised by legislative action
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.
✓ 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
✓ C. Shared by the legislative and executive departments
1|Page
,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
✓ 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.
✓ 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
✓ 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
✓ D. To raise revenues for government needs
This is an inherent limitation on the power of taxation
2|Page
, 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
✓ 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.
✓ 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
✓ D. Amount of tax to be imposed
Which of the following statements is not correct?
A. An inherent limitation of taxation may be disregarded by the application of a constitutional
limitation.
B. The property of an educational institution operated by a religious order is exempt from property
tax, but its income is subject to income tax.
C. The prohibition of delegation by the state of the power of taxation will still allow the BIR to
modify the rules in time for filing of returns and payment of taxes.
3|Page
ANSWERS & CLEAR WORKINGS| - DUE 10
September 2025
____________________________________________________________________________________
QUESTIONS AND CORRECT ANSWERS
Which of the following is a nature of taxation?
A. The power is exercised by legislative action
B. It is essentially an administrative function
C. It is generally payable in money
D. The state can exist without it
✓ The power is exercised by legislative action
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.
✓ 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
✓ C. Shared by the legislative and executive departments
1|Page
,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
✓ 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.
✓ 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
✓ 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
✓ D. To raise revenues for government needs
This is an inherent limitation on the power of taxation
2|Page
, 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
✓ 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.
✓ 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
✓ D. Amount of tax to be imposed
Which of the following statements is not correct?
A. An inherent limitation of taxation may be disregarded by the application of a constitutional
limitation.
B. The property of an educational institution operated by a religious order is exempt from property
tax, but its income is subject to income tax.
C. The prohibition of delegation by the state of the power of taxation will still allow the BIR to
modify the rules in time for filing of returns and payment of taxes.
3|Page
