Exclusive Property of FRATERNITAS SCINTILLA LEGIS

Taxation law (Midterm Exam)1 | P a g e

1. State "X" was created. The installed President c. Yes, it is not valid because there is
called a constitutional convention. Dele----xxx--- double taxation.
- wanted to put in the Constitution the power of
the State and local government to ley----xxx---... d. Yes, the rule of double taxation is not
Delegate "B" objected on the ground that it is applicable.
not necessary to be written. Is B correct? 4. I. The power of taxation is inherent in
2. STATEMENT I- National taxes generally sovereignty being essential to the existence of
the government. Hence, even if not mentioned
cannot be the subject of compensation.
in the Constitution the state can still exercise
STATEMENT II- Local taxes generally cannot the power.
be subject of set-off
II. It is essentially a legislative function. Even
a. Statement I is correct, II is wrong in the absence of any constitutional provision,
taxation power falls to Congress as part of the
b. Statement II is correct, I is wrong. general power of law making.
c. Both statements are correct. a. Both statement are false.
d. Both statements are wrong. b. First statement false: Second is true
Explain your choice. c. Both are true
3. "J" is the owner of various real estate d. First statement true, Second is false
properties in a number of cities and
municipalities. Most of these properties are for 5. IS the exercise of the power of taxation
lease and yield rental income to "J". Every year confined solely with Congress? Explain.
"J" pays to the national government a real
estate dealer tax of P1,000.00 computed in 6. What is meant by the doctrine of equitable
accordance with a schedule provided in the recoupment? Explain.
NIRC, related to his gross income real estate 7. What re the four elements of a Valid
properties. The government where "J's" Classification?
properties are located also collect from him a
lessor's tax with the schedule of amount related 8. What are the three processes that are
to his gross income from real properties within included or embodied in the term "taxation"?
each local government. Are the local ordinances explain.
imposing there "lessor's taxes", will constitute
9. The rate of income tax on individuals are
in effect double taxation?
progressive, i.e., from 3% to 34%, depending
a. yes, the local ordinance is valid, there upon the amounts of net income. what is the
is no direct double taxation. principle behind the imposition of the
progressive scheme of income taxation? is this
b. No, the local ordinances are not valid not repugnant to the principle of equality and
because there is indirect double taxation. justice? Explain.

Article 19 of NCC: Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith.
Exclusive Property of FRATERNITAS SCINTILLA LEGIS
Taxation law (Midterm Exam)2 | P a g e
10. Congress pass a law requiring all OFW's to other hand, it has also been stated the "Power
pay a Contract Worker's Tax of P10,000.00 each to tax is nit the power to destroy while this
per annum. The money generated will be used court sits". Reconcile the apparently
solely to support/assist distressed oversees inconsistent statements.
workers in the Middle east who will return to
the Philippines permanently, of which they will 20. May the State subject itself or its subdivision
be given livelihood programs if the government. or instrumentality to tax? if so when? reason.
Mr. X, a nurse working in Canada, petition the 21. A statute is enacted levying a tax of P100
Supreme Court that the law is unconstitutional annually on every inhabitant of the country
because it requires him to pay, yet, he cannot above 18 years old, the proceed of which are to
be assisted in time of need. IS the Law valid? be used for the support of the public
Cite the specific provision of the Constitution educational system "X" assailed the statue on
violated, if any. the ground the he does not send and has never
sent any of his children to the public school.
11.
Decide.
12.
22. The city council of Cagayan de Oro passed
13. an ordinance imposing an occupation tax on the
profession or occupation of "installation
14. managers" "X" is the only person with such
15. occupation in the city. Can he successfully
challenge the validity of the ordinance as being
16. X and Co., a non-stock corporation which discriminatory since he is the only one
owns and operates a memorial park contest the adversely affected?
real estate assessment made by municipality
"Y". Sued by the municipality, X and Co. 23. Do tax laws operate beyond the jurisdiction
contends that burial grounds are exempt from of the taxing authority? Explain.
the real estate tax. it appears that two years 24. To address its budget for the year 2014.
before the assessment issued by the Kagawad "X" of the Cagayan de Oro city council
Municipality "Y", "X" and Co. had declared proposed that the kagay-anon earning on their
dividends to its stock holders. IS "X" and Co., real properties abroad be subjected to local
justified in disputing assessment? Reasons. income tax. Kagawad "Y" opposed the tax
17. Differentiate the revocation of Statutory Tax measure. Which of the following is legally
Exemption from Constitutional Tax Exemption. tenable objection? Explain your choice.

18. May a person legally refuse to pay a tax and 25. "X" has a deposit of P1M in a bank. it earned
special assessment on the ground that he will interest income but subject to income tax
derive no personal benefit from the tax? government offered tax free bonds on interest
income. "X" withdrew all his deposits and the
19. It has been often repeated that the "Power government bonds. he then earned tax free
to tax involves the power to destroy" on the interest income. Is there escape of tax> explain.

Article 19 of NCC: Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith.
Exclusive Property of FRATERNITAS SCINTILLA LEGIS
Taxation law (Midterm Exam)3 | P a g e
26. A franchise granted to NAPOCOR exempts offered herself to become a state witness and
them from all taxes. CDO gas manufactures asked PNOY that she will be given tax amnesty
XXXXX oxygen and acetylene gases. CDO Gas is of whatever unpaid taxes she will be liable of
liable to pay VAT for each sale. For each sale, her accumulation of propertied using the pork
CDO gas added the tax to the selling price. barrel PNOY is inclined to grant her tax amnesty
Which of the two entities has to be levied the through an executive order. you are one of the
tax with and who will ultimately pay the tax, netizens who does not want Napoles to be
CDO GAs or the NAPOCOR> explain. given the privilege. what will be your legal
ground to object in your blog regarding the tax
27. "X" is a religious non-stock and non-profit amnesty? Explain.
educational institution. "Y" is a stock and profit
educational institution. the gyms of both 32. To address the problem of unemployment
schools were rented. "X's" gym was rented by in the Philippines, in the year 2011, Congress
the XXXXX Basketball Association. "Y's" gym was granted tax exemptions to the benefit to the
rented by "Dios Ko Day" an affiliate of LADLAD different foreign investors who will pull up
"X's: net income was used actually, directly and factories in the Philippines of which only
exclusively for religious purposes. While "Y's" Filipinos will be employed. The incentive given
net income was actually, directly and exclusively is that tax exemption will be for a period of five
used for charitable purposes. Which of the years provided that these companies will
following is correct? employ at least 1,00 workers. More so, to
address the problem of electricity and to curtail
a. Both X and Y are exempt from brow-outs in some parts of the country, foreign
income tax on rental income. companies are also given exemptions if they
b. Both X and Y is liable for income tax. can operate electric facilities in the Philippines
especially in Luzon and Visayas. The tax
c. Only X is liable for income tax exemptions are on business and income tax.
Many foreign investors put up factories and
d. Only Y is liable for income tax.
electric facilities because of the tax exemption
Explain. earlier granted by the previous Congress to only
three years. His counterpart in the Senate,
28. Is he shifting of the burden from the seller Senator Ramon Christopher Asis filed the same
to the buyer incompatible with the principle bill withdrawing all the tax exemption earlier
that taxes are the personal liabilities? granted to all foreign companies.

29. Who is the proper party to question or seek Granting that the present Congress will revoke
a refund of an indirect tax? Explain/ the tax exemption earlier granted by the
previous Congress, the revocation valid? Give
30. Is there a relief in both forms of double
reason.
taxation?

31. Juana Napoles was involved in the scam of

public funds of P10 billion, in conspiracy with
the legislators. When arrested, she met PNOY,
Article 19 of NCC: Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith.