True Statements
Fiscal Adequacy
 As a rule, provisions on the validity of tax
exemptions are resolved liberally in a favor of the
government.
 Taxes may be imposed retroactively y law, but
unless so expressed by such law, these taxes must
only imposed prospectively.
 Administrative feasibility means that tax laws must
be easy to understand and capable of being
enforced.
False Statements:
 As a rule, taxes are subject to set-off or
compensation.
 The President is authorized to increase or decrease
national internal revenue taxes.
 The Bureau of Internal Revenue has the duty and
exclusive power or enacting, implementing and
interpreting tax laws.
 Tax laws are either political or penal in nature.
 Tax avoidance is an act of using pretenses and
forbidden devices in order to lessen tax liability.
 Failure to pay taxes will render the business or
occupation illegal.
 Every Filipino citizen is taxable on all income
derived from sources within and outside of the
Philippines.
Identification:
1. It is an inherent limitation on the power of taxation
a. Rule on uniformity and equity of taxation –
constitutional limitation
b. Due process of law and equal protection of the
laws – constitutional limitation
c. Non-impairment of the jurisdiction of the
Supreme court in tax cases – constitutional
limitation
d. Tax must be for public purposes.
2. They exist independent of the constitution being a
fundamental power of the state, EXCEPT
a. Power of taxation
b. Police Power
c. Power of eminent domain
d. People Power
3. Basic Principles of a sound system, EXCEPT
a.
b. Administrative feasibility
c. Theoretical justice
d. Intellectual sensitivity
4. Our national internal revenue laws are civil in
nature.
5. The principal purpose of taxation is to raise
revenues for government needs.
6. Persons or things belonging to the same class shall
be taxed at the same rate. -?
a. Simplicity in Taxation
b. Reciprocity of taxation
c. Uniformity of Taxation
7. The tax should be proportional to the relative value
of the property to be taxed. -?
a. Simplicity of Taxation
b. Equality in taxation
c. C. Uniformity in Taxation
8. The following are nature of taxation, EXCEPT.
a. Inherent in sovereignty
b. Essentially legislative in character
c. Subject to inherent and constitutional
limitations.
d. Subject to approval by the people
9. This is a constitutional limitation on the power of
taxation
a. Tax laws must be applied within the territorial
jurisdiction of the state.
b. Exemption of government agencies and
instrumentalities from taxation.
c. No appropriation of public money for religious
purposes.
d. Power to tax cannot be delegated to private
person or entities.
10. Theoretical Justice – The tax imposed should be
appropriate to the taxpayer’s ability to pay.
11. Taxation as distinguished from police power and
eminent domain
a. Property is taken to promote general welfare. –
police power (taken or destroyed) eminent
domain (private property taken for public use)
b. Maybe exercised only by the government. –
taxation and police power
c. Operates upon the whole citizenry – taxation
and police power
 d. There is generally no limit as to the amount that
may be imposed.
12. Situs of Taxation – It literally means “place of
taxation”, the country that has the power and
jurisdiction to levy and collect the tax.
13. Which of the following is not a public purpose?
a. National Defense
b. Public education
c. Improvement of the sugar and coconut industries
d. Improvement of subdivision road.
14. Which is not an essential characteristic of a tax?
a. It is unlimited in amount
b. It is payable in money
c. It is proportionate in character
d. It is an enforced contribution
15. Police Power – The power to regulate liberty and
property to promote the general welfare.
16. Fiscal Adequacy – The sources of revenue, as a
whole, should be sufficient to meet the demands of
public expenditure.
17. Tax exemption – It is the privilege of not being
imposed a financial obligation to which others are
subject.
18. Which of the following is not a determinant of the
place of taxation?
a. Source of income
b. Citizenship of taxpayer
c. Residence of the taxpayer
d. Amount of tax to be imposed
19. An escape from taxation where the burden is
transferred by the one whom tax is assessed.
III. Enumeration
1. Principles of a sound tax system
a. Fiscal Adequacy
b. Equality or Theoretical Justice
c. Administrative Feasibility
2. Groups under the BIR deputy commissioner
a. Operations Group
b. Legal and Enforcement
c. Information Systems Group
d. Resource Management Group
3. Inherent limitation of taxation
a. Taxes may be levied only for public purposes
b. Tax legislation may not be delegated.
c. Tax power is limited to territorial jurisdiction of
the State.
d. Taxation is subject to international comity
e. Government entities are generally tax-exempt.
4. Examples of administrative requirements of BIR
a. A person subject to any internal revenue tax
shall register once with the appropriate revenue
office.
b. All persons who are engaged in business shall
secure from the BIR an authority to print
receipts or sales or commercial invoices before
a printer can print the same.
c. Follow rules given when issuing receipts or sales
or commercial invoices (see pg. 87)
d. Exhibition of certificate of payment at the place
of business.
5. Services under the BIR senior deputy commissioner
a. .
b. .
c. .
6. Powers of the BIR Commissioner of Internal
Revenue
a. The power to interpret tax laws and decide
disputed tax assessments
b. Summon and obtain information or testimony
of persons
c. Make assessments and prescribe additional tax
requirements
d. Compromise abate and refund or credit taxes
e. Suspend the business operations of a taxpayer.
f. .
g. .
7. Constitutional imitations of taxation
a. Due process of law
b. Equal protection of laws
c. Rule of uniformity and equity
d. Non-impairment of contracts
e. Origination of appropriation, revenue and tariff
bills
f. President’s power to veto
g. No public money shall be appropriated for
religious purposes
h. No imprisonment for nonpayment of poll tax
8. Objects of taxation
a. Persons
b. Properties
 c. Excise Objects
9. Purposes of Taxation
a. Revenue Purpose
b. Regulatory Purpose
c. Compensatory Purpose

IV. Taxable Income

1. 13th month pay in excess of P82, 000.

2. 10 days monetized sick leave credits of private
employees.
3. Statutory minimum wage of minimum wage earner
who has other reportable income.
4. Interest Income in bank deposit earned by duly
registered cooperative.
5. Separation pay due to voluntary resignation.
6. Money acquired through illegal means
7. Gains from the sale of bond with a maturity of 4 yrs.
8. Professional athlete’s salary.
9. 14th month pay of P32, 000 to complete the 13th
month pay and other benefits already received
amounting to P50, 000.
10. Board of Director’s fee.

V. Non- Taxable Income

1. Productivity incentive schemes arising from CBA,

P10, 000.
2. Overtime pay of a wage earner.
3. Amount Received in payment of moral damages due
to physical injuries.
4. Novel prize received due to civic achievement
contributions.
5. Income earned within the Philippines by the World
Bank.
6. P10, 000 productivity incentive bonus.
7. Annual clothing allowance of P5, 000.
8. Income of PAGCOR. – sabi sa book taxable daw wtf
9. Group insurance benefits.