Fundamentals of Accountancy: Taxation

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Questions and Answers

What is taxation primarily defined as?

A voluntary contribution to the government

An inherent power of the state (correct)

A process of economic growth

A fee for services rendered by the government

The Constitution of the Philippines confers the power of taxation to the state.

False

Name one attribute of taxation.

forced charge, pecuniary burden payable in money, levied by the legislature, assessed with a reasonable rule of apportionment, imposed by the state within its jurisdiction, levied for a public purpose

Taxation is a __________ process involving legislative measures and executive implementation.

legislative Signup and view all the answers

Which type of double taxation is legally objectionable?

Direct duplicate taxation Signup and view all the answers

Match the following attributes of taxation with their descriptions:

Forced charge = Compulsory financial obligation Pecuniary burden = Monetary payment required Levied by the legislature = Imposed through laws Public purpose = Intended for government needs Signup and view all the answers

Double taxation is prohibited in the Philippines.

False Signup and view all the answers

Which entity is primarily responsible for assessing and collecting taxes?

Executive branch Signup and view all the answers

Taxation must be conducted for a public purpose.

True Signup and view all the answers

What is the requirement for direct duplicate taxation to be considered a violation of due process?

The same property is taxed twice for the same purpose by the same authority within the same jurisdiction and period. Signup and view all the answers

What powers does taxation distinguish itself from?

Other inherent powers of the state such as eminent domain and police power. Signup and view all the answers

Ad Valorem is a tax based on the _____ of the article subject to taxation.

value Signup and view all the answers

Match the type of taxation with its description:

Ad Valorem = Tax based on value Double Taxation = Taxing the same property twice Indirect Duplicate Taxation = Not legally objectionable Direct Duplicate Taxation = Obnoxious type of double taxation Signup and view all the answers

What is the primary purpose of taxation?

To raise government funds Signup and view all the answers

Which of the following is NOT a requisite for direct duplicate taxation?

Tax imposed for different purposes Signup and view all the answers

Name one significant factor that determines if a taxpayer is subjected to Philippine tax laws.

Citizenship or residency of the taxpayer. Signup and view all the answers

Eminent domain allows the government to take private property without compensation.

False Signup and view all the answers

Taxation power is generally considered _____ in nature.

territorial Signup and view all the answers

What is the police power of the state mainly concerned with?

Regulating activities to promote public welfare Signup and view all the answers

Eminent domain is the power to take private property for ______ use.

public Signup and view all the answers

Match the inherent power of the state with its characteristics:

Taxation = No Limit on imposition Police Power = Sufficient to cover costs of regulation Eminent Domain = Owner is paid fair market value Signup and view all the answers

Which power allows the state to enforce contributions from the people?

Taxation Signup and view all the answers

The police power of the state is limited to specific regulations.

True Signup and view all the answers

What type of compensation is provided under eminent domain?

Just compensation based on fair market value Signup and view all the answers

What is the Lifeblood Theory in taxation?

Prompt availability of taxes is essential for government existence. Signup and view all the answers

The Necessity Theory suggests that taxation is a voluntary contribution by citizens.

False Signup and view all the answers

List one requirement that must be met for taxation to avoid injustice to individuals.

Notice and opportunity for hearing. Signup and view all the answers

Taxation is necessary to support the state's __________.

sovereignty Signup and view all the answers

Match the following theories of taxation with their descriptions:

Lifeblood Theory = Government cannot exist without taxes. Necessity Theory = Taxation funds required government functions. Benefits-Protection Theory = Inhabitants receive protection in exchange for taxes. Symbiotic Relationship Theory = Reciprocal relationship between state and taxpayers. Signup and view all the answers

A nonresident Filipino taxpayer is taxable on income generated from which source?

Within the Philippines Signup and view all the answers

What imposes limitations on the power of taxation?

Inherent and Constitutional limitations Signup and view all the answers

A resident alien is not taxable on income earned outside the Philippines.

True Signup and view all the answers

With taxes, the state has a reciprocal duty of protection towards its inhabitants.

True Signup and view all the answers

What are the three inherent powers of the state?

Taxation Power, Police Power, Power of Eminent Domain. Signup and view all the answers

What is a Resident Citizen in the context of Philippine taxation?

A Filipino who permanently resides or is domiciled in the Philippines. Signup and view all the answers

A _____ is a person who is not a citizen of the Philippines.

Alien Signup and view all the answers

Match the following taxpayer classifications with their descriptions:

Resident Citizen = A Filipino who permanently resides in the Philippines Nonresident Foreign = Taxation only on income earned within the Philippines Resident Alien = Subject to taxation on income sourced within the Philippines Nonresident Filipino = Taxable on income earned only within the Philippines Signup and view all the answers

Who are considered nonresident citizens according to the provided content?

Philippine citizens who reside abroad with the intention to stay Signup and view all the answers

For resident foreign corporations, income earned outside the Philippines is:

Not taxable Signup and view all the answers

A resident alien is defined as an individual who is a citizen of the Philippines.

False Signup and view all the answers

All domestic corporations are taxed on income generated from sources outside the Philippines.

False Signup and view all the answers

What is the definition of a domestic corporation?

Corporations created or organized in the Philippines under its laws. Signup and view all the answers

Under the National Internal Revenue Code, what classification does a corporation formed under Philippine law fall under?

Domestic Corporation Signup and view all the answers

An individual whose residence is outside the Philippines and is not a citizen is known as a __________.

nonresident alien Signup and view all the answers

Which of the following describes a resident alien?

An individual residing in the Philippines but not a citizen Signup and view all the answers

Match the following types of citizens and their definitions:

Nonresident Citizen = A citizen residing outside the Philippines with intention to remain abroad Resident Alien = An individual residing in the Philippines but not a citizen Domestic Corporation = Corporations organized under Philippine laws Nonresident Alien = An individual not a citizen and residing outside the Philippines Signup and view all the answers

A citizen who works abroad and derives income from that work is considered a nonresident citizen.

True Signup and view all the answers

A citizen of the Philippines who leaves during the taxable year for __________ residency is considered a nonresident citizen.

permanent Signup and view all the answers

Study Notes

Course Information

Course Title: Fundamentals of Accountancy, Business and Management 2
Institution: University of the Cordilleras-Senior High School
Location: Baguio City

Taxation as an Inherent Power

Taxation is an inherent power of the state that predates any specific legislation.
The Philippines' constitution doesn't grant this power; it merely limits its use.
Taxes are compulsory contributions from individuals and property.
Taxes are levied by the government's legislative branch for public needs.
Attributes of taxation include a forced charge, payable in money, levied by the legislature, and for a public purpose.

Taxation as a Process

Taxation is a process involving two distinct phases: policy-making (legislative branch) and implementation (executive branch).
Tax Policy, which occurs in the legislative branch, involves enacting tax laws and ordinances.
Tax Administration, conducted by the executive branch (e.g., Bureau of Internal Revenue), assesses, manages, and collects taxes.

Taxation as a Means

Taxation is a crucial source of funds for governmental operations.
Collecting taxes enables the government to fulfil its duties.
Tax collection is necessary for funding public services, projects, and programs.

Theories of Taxation

Lifeblood Theory/Bread and Butter Doctrine: The government cannot function without tax revenues.
Necessity Theory: Taxation is required for the government's continued existence and performance of essential functions.
Benefits-Protection Theory: This theory points to the reciprocal relationship between the state providing protection and citizens paying taxes.
Symbiotic Relationship Theory: This emphasizes the reciprocal duties between the state's protection and citizen's financial contributions (taxes).

Principles of a Sound Tax System

Fiscal Adequacy: Taxes must be adequate to meet the government's financial needs.
Administrative Feasibility: Taxes should be easy to collect and manage efficiently.
Theoretical Justice: Taxes should be fair and progressive.

Tax Avoidance vs. Tax Evasion

Tax Avoidance: The legal reduction of tax liability through legitimate means. e.g. tax exemptions, deductions, credits.
Tax Evasion: The unlawful means of reducing or avoiding tax burden. e.g. concealing income or assets.

Classification of Taxes

Direct Taxes: Taxes directly levied on the person or entity liable, like income tax.
Indirect Taxes: Taxes levied on the consumption or use of products or services, like value-added tax.
Taxation based on the subject matter- Personal tax, Poll tax, property tax, excise taxes, custom duty

Situs of Taxation

The location of the activity or property is a critical determinant in determining which jurisdiction and how to tax it.

Classification of Taxpayers

Resident Citizens, Non-Resident Citizens, Resident Aliens, Non Resident Aliens, Domestic Corporations, Foreign Corporations.

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Description

This quiz covers essential concepts of taxation as an inherent power of the state, emphasizing its role in public finance. Explore the process of taxation, including policy-making by the legislative branch and implementation by the executive. Understand the attributes and significance of taxes in governance.

Fundamentals of Accountancy: Taxation

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Questions and Answers

What is taxation primarily defined as?

The Constitution of the Philippines confers the power of taxation to the state.

Name one attribute of taxation.

Taxation is a __________ process involving legislative measures and executive implementation.

Which type of double taxation is legally objectionable?

Match the following attributes of taxation with their descriptions:

Double taxation is prohibited in the Philippines.

Which entity is primarily responsible for assessing and collecting taxes?

Taxation must be conducted for a public purpose.

What is the requirement for direct duplicate taxation to be considered a violation of due process?

What powers does taxation distinguish itself from?

Ad Valorem is a tax based on the _____ of the article subject to taxation.

Match the type of taxation with its description:

What is the primary purpose of taxation?

Which of the following is NOT a requisite for direct duplicate taxation?

Name one significant factor that determines if a taxpayer is subjected to Philippine tax laws.

Eminent domain allows the government to take private property without compensation.

Taxation power is generally considered _____ in nature.

What is the police power of the state mainly concerned with?

Eminent domain is the power to take private property for ______ use.

Match the inherent power of the state with its characteristics:

Which power allows the state to enforce contributions from the people?

The police power of the state is limited to specific regulations.

What type of compensation is provided under eminent domain?

What is the Lifeblood Theory in taxation?

The Necessity Theory suggests that taxation is a voluntary contribution by citizens.

List one requirement that must be met for taxation to avoid injustice to individuals.

Taxation is necessary to support the state's __________.

Match the following theories of taxation with their descriptions:

A nonresident Filipino taxpayer is taxable on income generated from which source?

What imposes limitations on the power of taxation?

A resident alien is not taxable on income earned outside the Philippines.

With taxes, the state has a reciprocal duty of protection towards its inhabitants.

What are the three inherent powers of the state?

What is a Resident Citizen in the context of Philippine taxation?

A _____ is a person who is not a citizen of the Philippines.

Match the following taxpayer classifications with their descriptions:

Who are considered nonresident citizens according to the provided content?

For resident foreign corporations, income earned outside the Philippines is:

A resident alien is defined as an individual who is a citizen of the Philippines.

All domestic corporations are taxed on income generated from sources outside the Philippines.

What is the definition of a domestic corporation?

Under the National Internal Revenue Code, what classification does a corporation formed under Philippine law fall under?

An individual whose residence is outside the Philippines and is not a citizen is known as a __________.

Which of the following describes a resident alien?

Match the following types of citizens and their definitions:

A citizen who works abroad and derives income from that work is considered a nonresident citizen.

A citizen of the Philippines who leaves during the taxable year for __________ residency is considered a nonresident citizen.

Study Notes

Course Information

Taxation as an Inherent Power

Taxation as a Process

Taxation as a Means

Theories of Taxation

Principles of a Sound Tax System

Tax Avoidance vs. Tax Evasion

Classification of Taxes

Situs of Taxation

Classification of Taxpayers

Studying That Suits You

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