BLT 2A Chapter 1 – General Principles of Taxation Practice Test

These questions are part of the practice quiz. Start practicing

• Which combination correctly identifies the basic principles of a sound tax system?
• How do tax policies influence behavior and economic efficiency?
• Tax statutes are generally prospective but may operate retrospectively if there is clear legislative intent. Which option best expresses this statement?
• Which statement best describes a core objective of taxation?
• In tax administration, which statement best describes the role of the tax authority?
• Which statement about retroactivity in taxation is supported by the material?
• Exemption from tax is a privilege, which is construed strictly against the taxpayer except in certain situations such as:
• Which statement about delegation to administrative implementation is true?
• How does debt financing relate to tax policy and public finance?
• The primary purpose of taxation is to raise revenue for the government. Taxation is also used for regulation. Which statement is correct?
• Under the ability-to-pay principle, which design is consistent?
• Which statement best describes the nature of taxation at a general level?
• There is no objectionable double taxation if the tenements are taxed and the business leasing them is also taxed. This statement is:
• A tax base on a fixed percentage of the amount or value to be taxed
• Which of the following is a characteristic of taxation that distinguishes it from police power and eminent domain?
• A new law taxes income earned from a particular activity that was not previously taxed, and applies retroactively to incomes earned within the fiscal year when the law took effect. Is the law valid?
• Which is the least source of tax laws among the following?
• What is transfer pricing and why is it relevant to general taxation principles?
• Incidence of taxation means
• What does horizontal equity mean in taxation?
• Which statements about revenue regulations are true?
• What is tax incidence, and how does it differ from statutory incidence?
• Which statement about refundable credits interaction with tax liability is true?
• Regarding inherent limitations and constitutional limitations on the power to tax, which statements are correct?
• Which of the following is an example of an indirect tax?
• Which theory states that without taxes, a government would be paralyzed for lack of power to activate and operate it?
• Which statement correctly describes rate changes in taxation?
• Tax avoidance is distinguished from tax evasion by whether the methods used to reduce liability are permitted by law.
• What are basic compliance concepts like due dates and records?
• Exemption from tax is construed strictly against the taxpayer except in which situations?
• Base broadening refers to which of the following?
• Charitable institutions and similar properties may be exempt from taxation under which concept?
• In tax design, base broadening can enable policymakers to do which of the following while preserving revenue?
• Tax based on the value of property or transaction as a percentage is called
• Territorial taxation is best described as taxing which income?
• What are the main types of indirect taxes on consumption?
• What is the purpose of penalties and interest in tax administration?
• As to the scope of legislative power to tax, which of the following is correct?
• Which function determines the amount of tax owed by a taxpayer?
• In every case of doubt, tax statutes are construed
• What is a tax credit allocation such as a child tax credit?
• Equality in taxation means:
• According to the Constitution, revenue bills must originate exclusively in which body?
• Which statement about the ability-to-pay principle is not correct?
• Which of the following is an inherent limitation on the power of taxation?
• Which statement describes the restriction on the power of taxation recognizing property of foreign government?
• The rule of 'No estoppel against the government' means:
• In taxation, the benefits-received principle states that taxpayers should pay taxes in proportion to:
• Which of the following is NOT a nature of taxation?
• A tax of a fixed amount per person residing in a territory, irrespective of wealth or occupation is known as a
• Which concept does the phrase "lifeblood of the government" refer to in the context of taxation?
• Tax exemption of the government: which statements are correct? I. The State cannot be taxed without its consent, otherwise derogation to its sovereignty. II. Tax exemption applies only to government entities through which the government directly exercises governmental functions. III. Government agencies performing governmental functions are exempt from tax unless expressly taxed, while those performing proprietary functions are subject to tax unless expressly exempted.
• There can be double taxation when the state imposes tax on every separate and distinct business. This statement is:
• Which principle states that taxes should be proportional to the payer's ability to bear the burden?
• The principle that taxes should be imposed in proportion to the taxpayer's ability to pay is called
• What are the main types of direct taxes on individuals?
• Being legislative in nature, which of the following are legislative functions of taxation?
• Define tax incidence and provide a scenario where statutory and economic incidence differ.
• What is the primary purpose of payroll taxes in taxation practice?
• In the general sense, double taxation is said to violate which constitutional right?
• Which statement accurately differentiates rate changes from base changes in tax policy?
• Which statement will justify that the State can enforce contributions (tax) without a specific constitutional authorization?
• Statement: Inherent powers of the State exist independent of the constitution. Statement: The taxing power of local government units derives from a constitutional grant.
• Which statement correctly describes base changes in taxation?
• What are the primary objectives of taxation?
• Where does the taxing power of provinces, municipalities, and cities originate?
• What is a tax expenditure? Example.
• What best defines taxation?
• Which statement is true about base broadening?
• Taxation powers are subject to which type of limitations?
• Statement 1: The aspects of taxation are shared by the legislative and executive branches of the government. Statement 2: Taxes should be prospective and should not be given retroactive effect because they are burdens.
• Which statement about the two statements in the following is correct: 1) An attempt to minimize one's tax constitutes fraud, taxpayer may diminish his liability by any means, which the law permits. 2) To avoid is legal but to evade is illegal.
• The principle that dictates how tax burdens are distributed among different groups is known as
• From where does the local taxing power originate for provinces, municipalities, and cities?
• How do exemptions affect the size of the tax base?
• How does a lump-sum or flat tax function in principle?
• Which of the following best expresses the 'ability-to-pay' principle in taxation?
• The power of taxation is basically legislative in character. Which of the following is a legislative function?
• Tax exemption versus tax amnesty: which statement correctly describes tax exemption?
• Regarding penalties, which is correct about revenue regulations?
• The requirement that tax sources be sufficient to meet the government's expenditures is known as
• Which statement about the inherent nature of taxation is correct?
• Which principle suggests taxpayers should pay in proportion to the benefits they receive from government goods and services?
• Which statement about tax avoidance and evasion is correct?
• Revenue regulations must not be contrary to the law they implement.
• What is the concept of economic efficiency in tax design?
• Ligaya Educational Foundation, Inc., a for-profit educational institution, leases part of its property. Is the leased portion subject to real property tax?
• What is a capital gains tax and when is it typically charged?
• Explain the concept of tax treaties and double taxation relief.
• "The power to tax involves power to destroy" means:"
• Which of the following is correctly categorized as an administrative task?
• Define marginal tax rate and average (effective) tax rate.
• Which doctrine prohibits delegating the power to impose taxes?
• Which statement best describes base broadening in tax reform?
• Which of the following can serve as a tax base?
• Being legislative in nature, the power to tax may not be delegated, except:
• Which of the following is a characteristic of a good tax system?
• In a scenario where city real estate tax applies to tenements and the leasing business is also taxed, there is no objectionable double taxation.
• Which statement best describes the purpose of tax expenditures?
• Double taxation relief is achieved primarily through what mechanism?
• The actual effort exerted by the government to effect the exaction of what is due from the taxpayer is known as
• One characteristic of internal revenue laws is that they are generally prospective in operation, though retrospective operation is possible if legislative intent is clear.
• Which statement describes the constitutional origin of revenue bills?
• Which statement aligns with the certainty principle in taxation?
• Statement 1: Tax exemption applies only to government entities that exercise proprietary functions. Statement 2: All government entities regardless of their functions are exempted from taxes because it would be impractical for the government to be taxing itself. Which of the following is correct?
• Which of the following expresses the elements of double taxation?
• Which mechanism is commonly used to influence social behavior via tax policy?
• Which statement is true about double taxation in relation to two statements: 1) There can be double taxation where the state imposes tax on every separate and distinct business; 2) There is no objectionable double taxation if tenements are taxed while leasing business is taxed.
• Which statement accurately describes withholding and self-assessment?
• Which body is primarily responsible for initiating revenue bills?
• A law granting tax amnesty to those who have not paid income taxes and at the same time providing for the refund of taxes to those who have already paid them is challenged for validity. Which statement accurately reflects its validity?
• What is the difference between a tax rate and a tax burden?
• What is the relationship between tax policy and social policy?
• In the digital economy, which issues illustrate the need for new taxation rules?
• Which statement best distinguishes a tax from a license fee?
• Which of the following is an example of a direct tax?
• In every case of doubt, tax exemptions are construed
• Which statement best describes how tax credits differ from deductions?
• Explain how the internet and the digital economy affect taxation principles.
• Which elements are commonly cited as aspects of taxation?
• Which statement correctly describes an indirect tax?
• Base erosion occurs when what happens to the tax base?
• Explain progressive, proportional, and regressive tax structures.
• Residence-based taxation taxes individuals based on which criterion?
• Which statement correctly distinguishes direct taxes from indirect taxes?
• Which of the following is to be regarded as tax minimization through legal means?
• Which statement about taxation is true?
• Double taxation in its general sense would, according to the discussed principle, violate which constitutional right?
• Which statement about the nature of the government's tax power is true?
• Which statement is NOT considered a basic principle of a sound tax system?
• Is it true that double taxation can occur when the state imposes tax on every separate and distinct business in which a person is engaged?
• Which of the following is NOT a characteristic of the State's power to tax?
• What is an assessment in tax administration, and what is an assessment notice?
• Which term refers to the act of imposing a tax by law?
• Statement: Eminent domain may raise money for the government. Statement: Barrios, barangays, municipalities and provinces may collect taxes from inhabitants.
• Tax evasion is illegal.
• Regarding Statements 1 and 2 about tax avoidance and evasion, which option is correct?
• Which of the following is typically considered an administrative function in taxation?
• How does the concept of economic efficiency constrain tax design?
• What does vertical equity mean in taxation?
• Which statements correctly described tax exemption of the government?
• Which statement best describes a key requirement of sound tax administration?
• Which statement accurately reflects the impact of tax policy on compliance costs and error rates?
• Statement 1: Symbiotic relation is the reason why the government would impose taxes on income of resident citizens derived from sources outside the Philippines. Statement 2: Jurisdiction is the reason why citizens must provide support to the state so the latter could continue to give protection.
• Which principle is primarily concerned with prohibiting intentional and arbitrary discrimination among taxpayers in the same class?
• Which statement best distinguishes tax planning from tax evasion?
• Which factor is least relevant to determining residence-based taxation?
• In a progressive tax system, the average tax rate increases as the base amount increases.
• Which statement best describes progressive taxation?
• Which statements are correct regarding the purposes of taxation?
• Why is simplicity important for taxpayers and administrators?
• Which statement describes the policy use of tax credits?
• Which term refers to determining the amount of tax due on a taxpayer?
• Which are elements of double taxation?
• The tax law must be capable of convenient, just and effective administration
• Statement 1: The distinction of a tax from permit or license fee is that a tax is imposed for regulation. Statement 2: Non-payment of tax does not necessarily render a business illegal.
• Which of the following best describes a direct tax?
• Which statement best describes a tax expenditure?
• In the EVAT scenario, which statement(s) justify the enacted EVAT law? I. The Constitution simply means that the initiative for filing revenue, tariff or tax bills must come from the House of Representatives on the theory that, elected as they are from the districts, the Members of the House can be expected to be more sensitive to the local needs and problems. II. It is not the law but the revenue bill which is required by the Constitution to "originate exclusively" in the House of Representatives because a bill originating in the House may undergo such extensive changes in the Senate that the result may be a rewriting of the whole, and a distinct bill may be produced.
• In the context of consumption taxes, the tax base is defined as?
• Levying of local government taxes may be exercised by which body?
• Which statements correctly describe the 'Equal protection' clause in taxation?
• On theoretical basis of taxation, which statement is true?
• The concept of convenience of payment in tax design implies:
• Base erosion and base-broadening measures serve what purpose?
• Which statement accurately describes the fundamental requirement for imposing a tax?
• Which of the following best describes the effect of a flat tax on progressivity?
• Which statement about simplicity as a characteristic of tax systems is true?
• Which statement correctly describes refundable credits?
• Regarding progressivity in taxation, which statements are correct?
• Which statement about taxes is incorrect?
• Tax credits are often used in policy terms to promote specific activities. Which is a common example?
• What is the difference between tax avoidance and tax evasion?
• Which of the following sets of factors determine the situs of taxation?
• The ability-to-pay principle asserts that taxes should be:
• Which tax structure is characterized by a higher burden on lower-income individuals as the base increases?
• Which statement correctly describes how tax credits are used in policy?
• What is tax neutrality?
• ABC Printers relied on a BIR ruling that printing companies were not covered by a new tax law. The BIR later reversed, stating that printing companies are covered. Could the BIR assess back taxes for years prior to the new ruling if the reversal is prejudicial to the taxpayer?
• What is the tax base?