SUMMATIVE EXAM: PRELIM PERIOD (PERFORMANCE TASK) Read and analyze each item. Choose the letter of the correct answer. (50 items x 2 points) Analyze the following statements: Statement I: The Constitution is the source of the State's taxing power. Statement II: The police power of the government may be exercised through taxation. a. Statement I is correct. c. Both statements are correct. b. Statement II is correct. d. Both statements are incorrect. 2. Which of the following requires public improvement? Taxation Il. Police Power Ill. Eminent Domain a. I only c. Ill only b. I and Il only d. Il and ill only 3. Which of the following DOES NOT state the differences among the inherent powers of the State? a. The property taken under eminent domain and taxation is preserved, but that of the police is destroyed. b. Eminent domain does not require a constitutional grant, but the formidable taxation limits its existence by the legislature. C. Police power and taxation are exercised only by the government, but private entities may exercise eminent domain. d. Police power regulates property and liberty, while eminent domain and taxation only affect property rights. 4. Which of the following statements is FALSE? a. The government can only enforce contribution upon its citizens when the Constitution grants it. b. The government automatically possesses the power to collect taxes from its inhabitants. C. Taxation power exists inseparable from the State. d. The State has the supreme power to command and enforce contributions from the people within its jurisdiction. 5. Analyze the following statements: Statement I: The Constitution cannot take away the inherent powers of the State but may only prescribe its limitations. Statement II: There are laws necessary to confer the inherent powers of the State upon any government exercising sovereignty. a. Statement | is correct. c. Both statements are correct. b. Statement II is correct. d. Both statements are incorrect. 6. Which of the following statements is/are CORRECT? I. Taxes are pecuniary in nature. Il. Taxes co-exist with the existence of the State. Ill. Taxes are imposed on persons and property beyond the territorial jurisdiction of the State. a. I only c. I and Il only b. li only d. I, ll, and ill. Analyze the following statements: Statement I: The amount of money raised for the government in exercising its power to tax and police power is not based on the needs of the government. Statement Il: The money raised for the government to exercise its eminent domain power is based on the cost of processing property transfers from private entities or individuals to the government. a. Statement I is correct. C. Both statements are correct. b. Statement II is correct. d. Both statements are incorrect. 8. Which of the following statements is TRUE? a. The government and its political subdivision exercise the power of taxation and eminent domain. b. In police power, the property taken is preserved for public use. C. The Constitution creates the power of eminent domain. d. The exercise of the power of eminent domain and police power can be expressly delegated to the local government units by the lawmaking body. 9. Which of the following may NOT raise money for the government? a. Power of taxation c. Power of eminent domain b. Police power d. Privatization of the government's hospital 10. It is the reciprocal duty of support and protection between the people and the government. a. Basis of Taxation c. Scope of Taxation b. Situs of Taxation d. Theory of Taxation 11. Which of the following statements expresses the lifeblood theory? The government must enforce the assessed taxes. The underlying basis of taxation is government necessity; without tax, a government can neither exist nor endure. C. Taxation is an arbitrary method of exaction by those who are in the seat of power. d. The power of taxation is an inherent power of the sovereign to impose burdens upon subjects and objects within its jurisdiction to raise revenues. 12. Which of the following is the principal purpose of taxation? a. Encourage the growth of home industries through the proper use of tax incentives. b. Implement the police power of the State. Reduce excessive inequalities of wealth. d. Raise revenue for governmental needs. 13. After having been informed that most of the massage parlors in the city are being used as fronts for prostitution, the Sangguniang Panlungsod of Manila passed a tax ordinance subjecting massage parlors within its jurisdiction to such "onerous taxes" that leave them no other alternative but to stop operating. The passage of the law is a valid practice of which of the following? a. Taxation C. Eminent domain b. Police power d. Police power and power of taxation 14. A tax must be imposed for a public purpose. Which of the following is NOT a public purpose? a. National Defense c. Improvement of the sugar industry b. Public Education d. None of the choices15. Which of the following is the levying and imposition of tax and the collection of tax processes which constitute the taxation system? a. Basis of Taxation C. Nature of Taxation b. Aspects of Taxation d. Theory of Taxation 16. Which of the following are the aspects of taxation? I. Levying or imposition of the tax on persons, property, or exercise 1l. Collection of taxes already levied Ill. Sufficiency of governments sources to satisfy its expenditure a. I, ll, and Ill c. I and Ill only b. I and Il only d. li and lil only 17. Which of the following is the official action of an officer authorized by law to ascertain the amount of tax due from a taxpayer? a. Assessment c. Deficiency b. Delinquency d. Distraint 18. Taxation is exercised both by the legislative and executive branches of the government. Which of the following is NOT the function of Congress? a. Selecting the kind of tax c. Prescribing rules of taxation b. Fixing the amount of tax d. Assessment of tax liability 19. Which of the following is NOT a legislative aspect of taxation? a. Selection of the object or subject of tax c. Fixing tax rates b. Valuation of property for taxation d. Prescribing the general rules of taxation 20. Which of the following is NOT an administrative function of taxation? a. Selection of object of tax c. Valuation of property for taxation b. Equalization of assessment d. Collection of taxes 21. Which basic principle of a sound taxation system states that taxes must be based on taxpayers' ability to pay? a. Equality in taxation c. Theoretical justice b. Ability to pay theory d. Equity in taxation 22. Which of the following means that the tax law must be capable of convenient, just, and effective administration? a. Theoretical justice c. Administrative feasibility b. Fiscal adequacy d. Rule of apportionment 23. Which of the following is NOT constituted of double taxation? a. Both taxes are imposed in the same amount. b. Both taxes are levied for the same purpose. C. The same taxing authority imposes both taxes. d. Both taxes are imposed upon the same person.24. Which of the following is NOT double taxation? a. A lessor of the property pays a real estate tax and income tax on the same property. b. Imposition of tax on the finished products and raw materials used in the production of the said finished products Imposition of tax on corporate income and shareholder's dividends from the same corporation d. All the choices 25. Which of the following means "place of taxation" where the country has the power and jurisdiction to levy and collect the tax? a. Basis of taxation c. Scope of taxation b. Situs of taxation d. Theory of Taxation 26. Which of the following concepts of taxation is the basis for the situs of income taxation? a. Lifeblood doctrine of taxation c. Compensatory purpose of taxation b. Symbolic relation in taxation d. Sumptuary purpose of taxation 27. Which of the following is the least source of tax laws? a. Statutes c. Revenue regulations b. Presidential decrees d. Tax treaties or conventions 28. Which of the following statements is CORRECT? a. Revenue regulations have the effect of law and a memorandum order of the Commissioner of Internal Revenue, approved by the Secretary of Finance, has the same force and effect as revenue regulations. b. The revenue regulations which conflict with the law(s] are null and void. C. The interpretations of the former Secretary of Finance do not necessarily bind their successors. d. All of the choices 29. Which of the following is the tax of a fixed amount imposed among all persons residing within a specified territory without regard to their property or occupation they may be engaged in? a. The personal, poll, or capitation tax C. Excise tax b. Property d. Regressive 30. Which of the following is NOT an example of excise tax? a. Transfer tax C. Real property tax b. Sales tax d. Income tax 31. Which of the following is the tax demanded from the persons the law intends or desires to pay? a. Direct C. Excise b. Indirect d. Income 32. Which of the following is the tax demanded from one (1) person in the expectation and intention that s/he shall indemnify themselves at the expense of another? a. Direct C. Excise b. Indirect d. Income 33. Which of the following is NOT a direct tax? a. Immigration tax C. Income tax b. Transfer d. Value-added tax34. Analyze the following statements: Statement I: A revenue regulation must not be contrary to the provision of the law that it implements. Statement II: A revenue regulation cannot expand the provision of the law that it implements by imposing a penalty when the law that authorizes the revenue regulation does not impose a penalty. Statement | is correct. C. Both statements are correct. . Statement II is correct. d. Both statements are incorrect. 35. A Filipino citizen is a natural person who is? 1. Born by birth with father and/or mother as Filipino citizens. Il. Born before January 17, 1973, of a Filipino mother who elects Philippine citizenship upon reaching the age of majority. Ill. Acquired Philippine citizenship after birth (naturalized) per Philippine laws. a. I only c. I and Ill only b. I and Il only d. I, II, and ill 36. Individual taxpayers are: I. A natural person with income derived within the territorial jurisdiction of a taxing authority. Il. Natural persons are classified as citizens and aliens. a. I only c. I and li b. li only d. None of the above 37. Taxable only on income from sources within the Philippines, except: a. Resident citizen c. Resident alien b. Non-resident citizen d. Non-resident alien 38. refers to the operation by an Online Gaming Licensee (OGL) of online games of chance or sporting events via the internet using a network and software program exclusively for offshore customers/players who are non-Filipinos. a. Philippine Offshore Gaming Operation (POGO) C. POGO Licensing Authority b. Accredited Service Provider d. PAGCOR 39. Which of the following statements regarding minimum wage earner (MWE) is correct? a. The MWE is exempt from income tax on his basic statutory minimum wage (SMW). b. The MWE is exempt from income tax on his overtime pay, holiday pay, night shift differential, and hazard pay. c. The MWE is subject to income tax on income other than those mentioned in "a" and "b." d. All of the above 40. Senior citizens deriving returnable income during the taxable year, whether from compensation or otherwise, are: a. They must file their ITRs and pay the tax as they file the return. b. Exempt from compensation income taxes. C. Exempt from business taxes. d. Given a special tax of 15%% of gross income.41. Persons with disability (PWDs) deriving returnable income during the taxable year, whether from compensation or otherwise, are: a. They must file their ITRs and pay the tax as they file the return. b. Exempt from compensation income taxes. C. Exempt from business taxes. 1. Given a special tax of 15%% of gross income. 42. Analyze the following statements: Statement I: A "fringe benefit" is any goods, service, or other benefits furnished or granted by an employer in cash or kind, in addition to basic salaries to an individual employee. Statement II: "Compensation" means all remuneration for services performed by an employee for his employer under an employer-employee relationship, unless expressly excluded by the Code. a. Statement I is correct. C. Both statements are correct. b. Statement ll is correct. d. Both statements are incorrect. 43. In general, the applicable rate in computing fringe benefits tax beginning January 1, 2018, is: a. 32% C. 25% b. 30% d. 35% 44. The following are the requirement for the substituted filing of income tax returns EXCEPT: a. He had one (1) employer only. b. His income was purely compensation income. c. The income tax withheld by the employer is correct. d. He had consecutively filed his income tax return for five (5) years. 45. Analyze the following statements: Statement I: If an employee had multiple employers within the year, an income tax return must be filed at the end of the year. Statement II: If an employee had three (3) employers, on succession, for each of the past three (3) years, substituted filing of tax returns is not allowed. a. Statements I and Il are FALSE C. Statement I is FALSE, but statement II is TRUE b. Statement I is TRUE, but statement ll is FALSE D. Statements I and Il are TRUE 46. Pedro's income tax due for the year amounted to P80,000. He may elect to pay the tax due in installments as follows: In two (2) equal installments b. 1" installment is payable upon filling the annual income tax return c. 2"d installment is payable on or before October 15, following the close of the calendar year d. All of the above 47. The sources from which income is derived: a. Labor b. Illegal activities c. Profits derived from the sale or exchange of capital assets d. All of the above48. The sources from which income is derived: A B C D Labor True True True False Gifts and inheritance True False False False Use of capital True True False False 49. Which of the following is a requisite for an income to be taxable? a. There must be gain b. The gain must be realized or received c. The gain must not be excluded by law from taxation d. All of the above 50. Which of the following is NOT an income for income tax purposes a. The gain derived from labor b. Return on the excess Capital C. Excess on selling price over the cost of assets sold d. Gift received END