QUIZ 9.29.
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Part A: Instructions: Select the correct answers from the choices in the box (1 point each)
A) Identify who must pay, who is the subject B) Seller
of tax, who is formally assessed (Statutory
taxpayer)
C) Employer D) Relations
E) Customer F) Imposition of tax
G) Burden is NOT shifted H) Identify who eventually has the burden
(Tax-bearer)
I) Settling or coming to rest of tax J) Business owner
K) Double taxation L) Burden is shifted
M) Situs of Taxation N) Transfer of tax
1. Impact of a tax – initial phenomenon
2. Shifting of a tax – intermediate process
3. Incidence of a tax – result
4. Impact of Taxation - Point at which tax is originally imposed.
5. Incidence of Taxation – Point at which burden finally rests or settles down.
6. Apply impact of a tax in case of Value Added Tax (VAT)
7. Apply shifting of a tax in case of Value Added Tax (VAT)
8. Apply incidence of a tax in case of Value Added Tax (VAT)
9. Apply impact in case of Income Tax.
10. Apply shifting of a tax in case of Income Tax.
11. Apply incidence of a tax in case of Income Tax.
Part B: Instructions: Select the correct answers from the choices in the box (1 point each)
A) Manufacturer or producer pays the tax, B) Use of taxpayer of saving device or means
and improve his process of production to sanctioned or allowed by law, in order to
compensate the loss of shouldering the avoid or reduce tax liability.
payment of taxes.
C) Grant of immunity from a tax. It is freedom D) Principle of public policy, that public
from a financial charge or burden to which interest will be subserved by the exemption
others are subjected allowed.
E) Original price is P500, Tax is P100, price F) Original price is P500, Tax is P100, price
sold to purchaser the same, no added tax, sold to purchaser is raised by P100 resulting
resulting to P500 selling price. to P600 selling price.
G) Original price is P500, Tax is P100, price H) It partakes of an absolute forgiveness or
sold to purchaser is reduced by P100 waiver. It is a general pardon or intentional
resulting to P500 selling price so that the overlooking by the State of its authority to
consumer will purchase it. impose penalties on persons otherwise guilty
of tax evasion or violation of a revenue or tax
law.
I) A taxpayer refrains from selling his land in J) Use by taxpayer of illegal or fraudulent
order to avoid tax on the sale transaction. means to defeat or lessen the payment of
tax.
K) Retailer transferred the burden to the L) Manufacturer transferred the burden of
purchaser. tax to the wholesaler, then wholesaler to the
retailer, then retailer to the purchaser.
M) Transfer or passing of burden of a tax by N) Deliberate failure to report taxable income
the original payer/assessed/imposed to or property, deliberate reduction of income
another. that has been received.
O) Price is reduced by the amount of value to P) Burden of tax is transferred from the
be capitalized for future taxes. purchaser to retailer by purchasing only after
the price is reduces, and by retailer from
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wholesaler, and by wholesaler from
manufacturer.
Q) Estate Tax Amnesty. R) Mere personal privilege of the grantee,
generally revocable by the government, a
waiver on the part of the government of its
right to collect, and not discriminatory,
12. Tax Shifting
13. Forward shifting
14. Backward Shifting
15. Onward shifting
16. Example of Forward shifting
17. Example of Backward Shifting
18. Tax capitalization
19. Transformation
20. Example of Transformation
21. Tax evasion
22. Example of Tax evasion
23. Tax avoidance
24. Example of Tax avoidance
25. Tax Exemption
26. Rationale for tax exemption
27. Nature of tax exemption
28. Tax amnesty
29. Example of Tax amnesty
Part C: TRUE OR FALSE
30. Once shifted, the tax ceases to be tax and simply becomes part of the price or cost that
the buyer must pay to purchase the goods
31. Shifting is only applicable in case of direct tax
32. In shifting, what is transferred is not the payment of the tax or liability for the tax, but
merely the burden
33. Direct tax cannot be shifted
34. If tax is P100, but price is raised only by P90, there is shifting as to the P90, but no
shifting as to the P10
35. Where shifting has not occurred, the tax is absorbed by the statutory taxpayer
36. In backward shifting, it involves the shifting back of a single tax, while Capitalization
involves the throwing back of a whole series of taxes
37. Shifting and transformation can occur in the same transaction as for example, original
price is P500, tax is P100, the seller adds P60 to the price, resulting to the price of P560.
Here, there is shifting as to the P60 tax added to the selling price to be paid by the
purchaser, and there is transformation as to the P40 tax that will be shouldered by the
seller.
38. Tax avoidance is also called tax dodging. It is prohibited and is punishable by law,
subjecting the taxpayer to civil and criminal liabilities
39. Indirect double taxation is prohibited under the law-
40. Evasion of taxation is the absence of taxation
41. If tax due is P500,000 and the taxpayer paid only P400,000, there is tax evasion with
respect to the entire P500,000
42. Tax evasion is also called tax planning. It is not prohibited.
43. Tax evasion is also called tax minimization. It is not prohibited.
44. Sovereign State: Like the inherent power to tax, the power to exempt from taxation is an
attribute of sovereignty and in the exercise of power to tax
45. Local Government: no inherent power to tax, hence no inherent power to exempt from
taxation
46. Grounds for tax exemption are contract, public policy, international treaty or equity –
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47. Tax exemptions are construed strictly against the taxpayer, except when the law itself
expressly provide liberal construction or the exemption is in favor of the government –
48. Tax laws are construed strictly against the government and liberally in favor of the
taxpayer –
49. Tax exemption partakes of an absolute forgiveness or waiver by the government of its
right to collect what is due it and to give tax evaders who wish to relent a chance to start
with a clean slate -
50. Purpose of tax amnesty is to address problem of low revenue collection and poor
voluntary tax compliance –
51. Tax laws are not political and not penal in nature –
52. Generally, tax laws are prospective in nature, unless otherwise expressly provided as
retroactive –
53. Mandatory tax laws are those provisions designed merely for the information or
direction of officers or to secure methodical and systematic modes of proceedings –
54. Directory tax laws are provisions intended for the security of the citizens –
55. Sources of tax laws are constitution, legislation or statutes, administrative rules and
regulations, judicial decisions, NIRC, Tariff and Customs Codes, Local Governement Code,
Local tax ordinances –
Part D: ENUMERATION/IDENTIFICATION/DEFINITION
56. Factors in tax evasion: What is the end to be achieved? (1)_______
57. Factors in tax evasion: What is the state of mind?(1) _______
58. Factors in tax evasion: What is the course or failure of action? (1) _______
59. Differentiate tax evasion from tax avoidance (4)
60. Kinds of Tax exemption as to manner (2)
61. Kinds of Tax exemption as to scope or extent (2)
62. Kinds of Tax exemption as to object (2)
63. Enumerate when is there direct double taxation? (5)
64. When is there indirect double taxation? (3)
65. Situs of Taxation of Persons (1)
66. Situs of Taxation of Real property (1)
67. Situs of Taxation of Tangible Personal Property (1)
68. Situs of Taxation of Intangible Personal Property (1)
69. Situs of Taxation of Income (1)
70. Situs of Taxation of Business, occupation, transaction (1)
71. Situs of Taxation of gratuitous transfer of property (1)
Part E: Instructions: Select the correct answers from the choices in the box (1 point each)
A) Inherent limitations B) Power of taxation cannot be delegated.
C) No person shall be deprived of life, liberty D) All taxable articles or properties of the
and property without due process of the law same class shall be taxed at the same rate.
E) Government purpose, affecting inhabitants F) Exempt from taxation excess those income
of the State, not merely individual. generating not related to its purpose
G) No person shall be imprisoned for debt or H) Exemption from property taxes
non-payment of poll tax.
I) No law impairing obligation of contracts J) Sovereign equality among States
shall be passed.
K) No law shall be made respecting the L) Constitutional Limitations
establishment of religion or prohibiting the
free exercise thereof
M) State may not tax property outside its N) All persons subject to legislation shall be
borders. treated alike under like circumstances
O)Exempt from all taxes P) Power to not approve portion of the tax
bill
Q) No public money or property shall be
appropriated for use, benefit or support of a
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particular religion
72. Limitations on the power of taxation that are expressly found in the Constitution or
implied from its provisions.
73. Limitations that are expressly not embodied in the Constitution.
74. Due process of the law
75. Equal protection of the laws
76. Uniformity and Equity
77. Prohibition against imprisonment for non-payment of poll tax
78. Non-impairment of contracts
79. International comity
80. Territorial jurisdiction
81. Non-delegation
82. Public purpose
83. Exemption of non-stock, non-profit educational institution
84. Exemption of government from taxation
85. Power of President to veto
86. Exemption of religious, charitable and education entities, non-profit cemeteries and
churches
87. No appropriation for religious freedom
88. No infringement of religious freedom
