MULTIPLE CHOICE

Choose the best answer from the choices provided. 1. A tax must be imposed for public purposes. Which of the following is not a public purpose? A. Procurement of armyweapons B. Construction of rehabilitation centers for drugaddicts C. Construction of a satellite for a telcocompany D. Expenses on the President's state visits to othercountries 2. Persons or things belonging to the same class shall be taxed at the samerate A Simplicity intaxation B Equality in taxation C Reciprocity intaxation D Uniformity in taxation 3. For double taxation to be considered direct, it should meet the following criteria, except A Taxing the same objecttwice B Sameperiod C Same amount oftax D Samejurisdiction 4. This is an inherent limitation on the power oftaxation A Rule on uniformity and equity intaxation B Due process of law and equal protection of tinelaws C Non-impairment of the jurisdiction of the Supreme Court in taxcases D Exemption of the government 5. Taxation as distinguished from police power and power of eminentdomain A Property is taken to promote the generalwelfare B May be exercised only by thegovernment C Operates upon the wholecitizenry D There is generally no limit as to the amount that may beimposed

Case Study 1.1

THE SWEET TAX

To provide means for the rehabilitation and stabilization of the sugar industry so as to prepare it for the eventuality of the loss of the quota allocated to the Philippines resulting from the lifting of U.S. sanctions against African countries, Congress passes a law increasing the existing tax on the manufacture of sugar on a graduated basis. All collections made under the law are to accrue to a special fund to be spent only for the purposes enumerated herein, among which are to place the sugar industry a living wage and to improve their working conditions. Sweet, a sugar planter, files a suit questioning the constitutionality of the law alleging that the tax is not for a public purpose as the same is being levied exclusively for the aid and support of the sugar industry. Is the contention of Sweet tenable?

Case Study 1.2

WHO IS TO BLAME?

Many consider that it was untimely that the internal revenue office of Wakanda issued a memorandum circular during the pandemic reminding guidelines on the registration of online businesses for tax filing. As enacted under Wakanda's revenue code, online businesses are liable to income tax on the gains from their sales. One of Wakanda's officials, Senator Jack A. Moon, questioned the internal revenue office on its issuance indicating that it was not moral for it to run after online businesses and impose taxes on their income, more so that they are normally conducting such endeavors for mere subsistence. Is the senator's contention tenable?

Case Study 1.3	IS IT EXEMPT?
A congregation owns a parcel of land. Most of it is directly used for its religious and educational endeavors. A small commercial space was built beside the school it operates to rent out to businesses which would cater the needs of its students. The proceeds from rentals are being used for charitable purposes. Should the rental income and property be subjected to tax?

SITUS RULES APPLICATION:

Dina B. Nalican, Spanish by citizenship, obtained the income from the following during the year. Having posted in Shoppy, a customer browsing the online shopping applicationin General Santos City asked if she could inspect the car personally. It was after the inspection in Zamboanga City that the customer agreed to buy the car. It is to be delivered to and paid by the customer in DavaoCity. Dina has a hardware store located in Mactan, Cebu. She decided to close themain branch in Leyte five yearsago. She also lends thru the 5-6 system of lending in her residence in Quiapo. A debtor residing in Quezon City owes her P60,000, inclusive of interests. They are to meetin Sampaloc for the payment of saiddebt. Dina owns a condo unit in Laoag City. A student from Cagayan rents said property and pays to Dina's son (residing in Vigan City) the rent when they meet up inBatac City. Determine the situs of: 1. Tax on the gain on sale of hercar 2. Tax on her hardwarestore 3. Tax on interest incomeearned 4. Tax on rental incomeearned 5. PersonalTax

LIMITATIONS

Identify the source of the limitation on the power of taxation. Write C if it is constitutional, I if it is inherent, B if it is both constitutional and inherent and N if it is not a limitation. 1. Taxes collected must be used for publicpurposes 2. Taxes can only be imposed within the territory of theState 3. Taxes cannot beassigned 4. Tax treaties entered into with other contracting States must behonored 5. Imprisonment for non-payment of incometax 6. Non-delegation of the taxingpower 7. Exemption from taxes of the revenues and assets of religious, charitable or educational entities, nonprofit cemeteries, churches andmosques 8. No arbitrariness in assessment and collection oftaxes

ACTIVITY/EVALUATION

TRUE OR FALSE

Determine whether the following statements are true or false. Write answers on the space provided for. 1. Though the Senate is part of the Philippine Congress, tax bills cannot originate fromit. 2. The primary purpose of taxation is to raise revenues of the government in order to defray its expenses on its performance of publicgoods. 3. The basis of taxation is the government's necessity forfunding. 4. Tax laws are generally retrospective in application, meaning, application of which starts when the statute isenacted. 5. The Marshall Doctrine states that the power to tax is not the power to destroy while the courtsits. 6. The administrative act of taxation is primarily the duty of the Bureau of InternalRevenue. 7. The police power of the State may be exercised through taxation because taxes may be levied for the promotion of the welfare of thepublic 8. A person cannot be imprisoned for non-payment oftax.