Multiple Choice - Theory: Part 2

1. The Constitutional exemption of religious or charitable institutions refers only to

a. Real property tax
b. Income tax
c. Property tax and income tax
d. Business tax
2. The agreement among nations to lessen tax burden of their respective subjects is
called
a. Reciprocity
b. International comity
c. Territoriality
d. Tax minimization
3. An educational institution operated by a religious organization was being required by
a local government to pay real property tax. Is the assessment valid?
a. Yes, with respect to all properties held by such educational institution.
b. Yes, with respect to properties not actually devoted to educational purposes.
c. No, with respect to any properties held by such educational institution.
d. No, with respect to properties not actually devoted to educational purposes.
4. Which is not a Constitutional limitation?
a. No tax law shall be passed without the concurrence of a majority of all
members of Congress.
b. Non-appropriation for religious purpose
c. No law impairing government obligations on contracts shall be passed.
d. Non-impairment of religious freedom
5. Which of the following is not an inherent limitation of the power to tax?
a. Tax should be levied for public purpose.
b. Taxation is limited to its territorial jurisdiction.
c. Tax laws shall be uniform and equitable.
d. Exemption of government agencies and instrumentalities.
6. The following are inherent limitations to the power of taxation except one. Choose
the exception.
a. Territoriality of taxes
b. Legislative in character
c. For public purpose
d. Non-appropriation for religious purpose
7. That all taxable articles or properties of the same class shall be taxed at the same
rate underscores
a. Equality in taxation
b. Equity of taxation
c. Uniformity in taxation
d. None of these
8. The following are limitations of taxation:
A.Territoriality of taxation
B. Exemption of the government
C. Taxation is for publlc purpose.
D. Non-impairment of contracts
 E.Non-delegation of the power to tax

Which of these are classified as both constitutional and inherent limitations?

a. A and B
b. B and C
c. C and E
d. D andE
9. The provisions in the Constitution regarding taxation are
a. Grants of the power to tax
b. Limitations to the power to tax
c. Grants and limitations to the power to tax
d. Limitations against double taxation
10. The Constitutional exemption of non-stock, non-profit educational institutions refers to
a. Real property tax
b. Income tax
c. Property tax and income tax
d. Business tax
11. Which of the following is violative of the principle of non-delegation?
a. Requiring that legislative enactment must exclusively pertain to Congress
b. Authorizing the President to fix the amount of impost on imported and exported
commodities
c. Authorizing certain private corporation to collect taxes
d. Allowing the Secretary of Finance and the BIR to issue regulation or rulings which go
beyond the scope of a tax law
12. Which of the following violates Constitutional provisions?
a. Payment of salaries to priests or religious ministers employed by the Armed Forces of
the Philippines
b. Imposing tax on properties of religious institutions which are not directly and
exclusively used for religious purposes
c. Imposition of license for the sale of religious literature
d. Authorizing the President of the Philippines to fix the rates of tariffs or imposts
13. In order to phase-out a huge deficit, the President of the Philippines passed a law offering all
taxpayers with previous tax delinquency to pay a minimum tax in exchange for relief from
tax assessment in the period of delinquency. Is this a valid exercise of taxation power?
a. Yes, because the measure adopted is grounded upon necessity.
b. Yes, because the President is merely exercising his presidential discretion.
c. No, because the power of taxation is non-delegated.
d. No, because only the Department of Finance can issue such ruling.
14. Concerned with increasing unemployment rates in the country, the President of the
Philippines encouraged the Philippine Senate to pass a law granting special tax privileges to
foreign investors who will establish businesses in the country. The Senate accordingly
drafted the bill and passed to Congress for approval.
 Is this valid exercise of taxation power?
a. Yes. It is the discretion of the President to adopt any measures he deemed
necessary to alleviate poor conditions in the country.
b. Yes. Any means beneficial to the public interest should be given optimum
priority.
c. Yes. The President's proposal will have to be finally approved and passed by
the legislature. The rule on non-delegation of taxation would not be violated.
d. No. Tax bills shall originate from the House of Representatives.
15. Ram is the only practicing lung transplant specialist in Baguio City. The City
Government of Baguio passed a local ordinance subjecting the practice of lung
transplant to 2% tax based on receipts. Ram objected claiming that other transplant
specialists in other regions of the country are not subjected to tax.

Is Ram's contention valid?

a. Yes, because the rule of taxation should be uniform and equitably enforced.
b. Yes, because Ram is the only one subject. Other practitioners who would later
practice would not be covered by the ordinance.
c. No, because the ordinance would cover all transplant specialist who would
practice in Baguio City. The uniformity rule would not be violated.
d. No, because subjecting the new industry to taxation would hamper economic growth.
16. With the country under incessant shortage of sugar, the Philippine Congress
enacted a law providing tax exemptions and incentives to cane farmers without at
the same time granting tax exemptions to rice farmers who produce the staple food
of the Philippines. Is the new law valid?
a. Yes, since there is a valid classification of the taxpayers who would be
exempted from tax.
b. Yes, since sugar is more important than rice.
c. No, since the grant of exemption is construed in favor of taxpayers.
d. No, because there is no uniformity in the grant of tax exemption.
17. Congress passed a law subjecting government-owned and controlled corporations
(GOCCs) to income tax. Is the law valid?
a. Yes, because all government agencies and instrumentalities are subject to
tax.
b. Yes, because GOCCS are not government agencies and are essentially
commercial in nature.
c. No, because government agencies are exempt. This would pose a violation of
the equality clause in the constitution.
d. No, because GOCCS are constitutionally exempted from paying taxes.
18. Which of the following is nota constitutional limitation of the power to tax?
a. Non-impairment of obligation or contracts
b. Due process and equal protection of the law
c. Non-appropriation for religious purposes
d. Non-delegation of police power
19. The Philippine Congress enacted a law requiring foreign banks to withhold taxes
earned by Filipino residents in their country and to remit the same to the Philippine
government. Is this a valid exercise of taxation power?
 a. Yes, because foreign banks are within the territorial jurisdiction of the
Philippines.
b. Yes, the Philippines can enforce tax requirements to subjects of foreign
sovereignty even if they are outside the country.
c. No, as this leads to encroachment of foreign sovereignty.
d. No, this is prohibited by the Constitution.
20. Which of the following normally pays real property tax?
a. Bantay Bata, a non-profit charitable institution
b. Jesus Crusade movement, a religious institution
c. University of Pangasinan, a private proprietary educational institution
d. AM Property Holdings, a registered property development company
21. Tax exemption bills are approved by
a. Majority of all members of Congress
b. Solely by the President of the Republic
c. 2/3 of all members of Congress
d. Majority of the representatives constituting a quorum
22. The Japanese government invested P100,000,000 in a Philippine local bank and
earned P10,000,000 interest. Which is correct?
a. The income is exempt on grounds of territoriality.
b. The income is exempt due to international comity.
c. The income is subject to tax on the basis of sovereignty.
d. The income is subject to tax because the income is earned within the Philippines.