TAX

/Among the nature of taxation are the following. Which is not? O A. it is a means by which the government raises revenue O B. it is inherent in sovereignty C. the citizenry benefits from it O D. the government solely benefits from itThe following statements are correct except one. Which one? A. taxes may be imposed to raise O revenues or to provide disincentives to certain activities within the state B. the provisions of taxation in the O Philippine Constitution are grants of power and not limitations on taxing powers C. the state can have the power of O taxation even if the Constitution does not expressly give it the power to tax. D. for the exercise of the power of O taxation, the State can tax anything at any time.Pheleco is a power generation and distribution company operating mainly from the City of Taguig. It owns electric poles which it rents out to other companies that use pole such as telephone and cable companies. Taguig passed an ordinance imposing a fee equivalent to 1% of the annual rental for these poles. Pheleco questioned the legality of the ordinance on the ground that it imposes an income tax which local government units are prohibited from imposing. Rule on validity of the ordinance: a. The ordinance is void; the fee is O based on rental income and is therefore a tax on income. b. The ordinance is valid as a O legitimate exercise of police power to regulate electric poles.c. The ordinance is void; 1% of O annual rental is excessive and oppressive. O d. The ordinance is valid; an LGU may impose tax on income. Congress passed a law imposing taxes on income earned out of particular activity that was not previously taxed. The law, however, taxed incomes already earned within the fiscal year when the law took effect. Is the law valid? O a. No, because laws are intended to be prospective, not retroactive. b. No, the law is arbitrary in that it O taxes income that has already been spent. O c. Yes, since tax laws are the lifeblood of the nation. O d. Yes, tax laws are an exception; they can be given retroactive effect,Which is not an example of excise tax? A. transfer tax B. value-added tax C. income tax D. real property tax Which of the following is not a purpose of taxation? a. To reduce inequalities of wealth. b. As protective tariff on imported O goods to protect local producers against foreign competitions. c. To encourage the growth of home O industries through the proper use of tax incentives. d. To expropriate property for the promotion of general welfare.One of the following is not among the basic principles of a sound tax system. Which one is not? A. fiscal adequacy B. collection of tax O C. theoretical justice D. administrative feasibility It is a tax of a fixed proportion of the value of the property with respect to which the tax is assessed an requires the intervention of assessors or appraisers to estimate the value of such property. A. specific O B. ad valorem C. special or regulatory O D. none of the aboveIn a loan agreement between the Bangko Sentral ng Pilipinas (as borrower) and private international banks (as lenders), it is stipulated that all payments of interest by the Central Bank to the lenders shall be made free and clear from all Philippine taxes which may be imposed thereon. Is the stipulation valid? O a. Yes, based on international comity. O b. Yes, based on the doctrine of non- taxability of the government. O c. No, violative of the inherent limitations. O d. No, violative of the constitutional limitations.XXX Corporation, an export oriented company, was able to secure a BIR ruling in June 2005 that exempts from tax the importation of some of its raw materials. The ruling is of first impression, which means the interpretation made by the Commissioner of Internal Revenue is one without established precedents. Subsequently, however, the BIR issued another ruling which in effect would subject to tax such kind of importation. XXX Corporation is concerned that said ruling may have a retroactive effect, which means that all their importations done before the issuance of the second ruling could be subject to tax. May the BIR rulings be given retroactive effect?Subsequently, however, the BIR issued another ruling which in effect would subject to tax such kind of importation. XXX Corporation is concerned that said ruling may have a retroactive effect, which means that all their importations done before the issuance of the second ruling could be subject to tax. May the BIR rulings be given retroactive effect? O a. No, BIR rulings are prospective in nature. b. No, BIR rulings are not retroactive O if they are prejudicial to the taxpayer. c. Yes, tax exemptions should be O interpreted strictly against the taxpayer. d. Yes, tax must favor the O government's power to collect its revenues.Congress passed a sin tax law that increased the tax rates on cigarettes by 1,000%. The law was thought to be sufficient to drive many cigarette companies out of business, and was questioned in court by a cigarette company that would go out of' business because it would not be able to pay the increased tax. The cigarette company is: O a. Wrong because taxes are the lifeblood of the government. b. Wrong because the law recognizes that the power to tax is the power to destroy. c. Correct because no government can deprive a person of his livelihood. O d. Correct because Congress, in this case, exceeded its power to tax.Dina Gaganda sued Dino Titino for breach of promise to marry. Dino lost the case and duly paid the court's award that included among others, Php100,000 as moral damages for mental anguish Dina suffered. Did Dina earn a taxable income? a. She had a taxable income of O P100,000 since income is income from whatever source. O b. She had no taxable income because it was a donation. O c. She had taxable income since she made a profit. O d. She had no taxable income since moral damages are compensatory.In case of conflict between the tax code and generally accepted accounting principles (GAAP): O a. Both tax code and GAAP shall be enforced. b. GAAP shall prevail over tax code. c. Tax code shall prevail over GAAP. O d. The issue shall be resolved by the courts. What is required to make a BIR ruling first impression a valid one, except? O a. Must be reasonable and within the authority conferred. O b. Must be germane to the purpose of the law. c. Must be published. O d. Must be prospective in application.This rule is not applicable on the construction of tax laws. a. If the law is repealed, taxes O assessed before repeal of the law may no longer be collected. b. If the intent of the tax is not clear as to whether the taxpayer is O covered by the tax obligation, the law shall be construed against the government. c. Where the intent to tax is clear and the taxpayer claims he is O exempt from the tax obligation, the tax shall be construed against the taxpayer. d. Provisions intended for the O security of the taxpayer of to insure equality or uniformity of taxation are mandatory.A store in the Umasa market in Paasa City was discovered by the BIR agents selling luxury items worth P500,000.00 suspected to have been smuggled into the country by the storeowner. May the Commissioner of Internal Revenue put under "preventive embargo" said luxury items? a. Yes, it is like constructive distraint. O b. Yes, because of anti-smuggling law. O c. No, violative of search and seizure clause of the Constitution. d. No, violative of the due process clause of the Constitution.The following reasons may be given by a taxpayer in refusing to pay his tax liability. Which is not acceptable for legally refusing to pay the tax? O a. That he has been deprived of due process of law. O b. That there is lack in territorial jurisdiction. O c. That the prescription period for the collection of tax has lapsed. O d. That he will derive no benefit from the tax