Income Taxation
Midterm Examination
December 13, 2024
SET A
Full Name:
Year/Course/Section:
True or False.
1. The three fundamental powers of the state may be exercise only by the government. False
2. Taxation is a process or means by which the sovereign, through its law-making body raises income to defray the
expenses of the government. True
3. Eminent domain may be exercise even by public service corporations and public entities. True
4. Police power regulates both liberty and property. True
5. Taxes are raised to cover the cost of governance. True
6. Toll is one of the taxes collected by the government. False
7. License fees are imposed in the exercise of police power. True
8. License fee is imposed to raised revenue. False
9. Tax is generally unlimited because it is based on the needs of the State. True
10. The amount imposed in the exercise of police power depends on whether the activity is useful or not. False
11. The distinction of a tax from permit or license fee is that a tax is one in which there is generally no limit on the
amount that may be imposed. True
12. Debt, as distinguished from tax, may be paid in kind. False
13. Under the equal protection clause of the constitution, all persons subject to legislation shall be treated alike under
dissimilar circumstances and conditions, both in the privileges conferred and liabilities imposed. False
14. Special assessment is a tax. False
15. Special assessment is imposed on persons, property and property rights. False
16. A revenue bill may originate from the Senate and on which the same bill the House of Representatives may
propose amendments. False
17. A person may refuse to pay on the ground that he will not receive a benefit from the tax. False
18. One of the schemes of shifting the incidence of tax burden is by transferring the sales tax of a manufacturer to the
distributor, then in turn to the wholesaler, to the retailer and finally to the consumer. True
19. Transformation is a method by which the manufacturer or producer upon whom the tax is imposed pays the tax
and strives to recover such expense through lower production cost without sacrificing the quality of his product.
True
20. In case of ambiguity, tax laws shall be interpreted liberally in favor of the government. True
21. The distinction of a tax from permit or license fee is that a tax is imposed for regulation. False
22. Non-payment of tax does not necessarily render a business illegal. True
23. Symbiotic theory states that without taxes, a government would be paralyzed for lack of power to activate and
operate it, resulting in its destruction. False
24. Collection is the actual effort by the government to effect the exaction of what is due from the taxpayer. True
25. The aspects of taxation are shared by the legislative and executive branches of the government. True
26. Tax laws should be prospective and should not be given retroactive effect. True
27. Eminent domain may raise money for the government. False
28. Equality or theoretical justice states that the tax should be imposed proportionate to the taxpayer ability to pay.
True
29. To avoid tax is legal but to evade tax is illegal. True
30. Deliberate reduction of taxable income that has been received is an example of tax avoidance. False
