Answered: Statement 1: Police power can be used…

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

ChapterST1: Government Spending And Taxation

Section: Chapter Questions

Problem 3CQ

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1. Statement 1: Police power can be used to raise revenue for the government. Statement 2: The primary purpose of taxation is to implement police power. Statement 3: One example of the principle fiscal adequacy is the Introduction of electronic Filing (Electronic Filing and Payment System (EFPS) or e-BIR Forms Package A. Only statement 2 is false. B. Only statement 1 is true. C. Only statement 2 is true. D. Only statement 3 is false. 2. Statement 1: If Nicanor are both engaged in trade or business, both must be taxed alike. Statement 2: Nicanor reported to the BIR that Inday is a tax evader. The BIR cannot forthwith collect the tax because it has to go through a process. A. Inherent limitation, Inherent limitation B. Inherent limitation, Constitutional limitation C. Constitutional limitation, Inherent limitation D. Constitutional limitation, Constitutional limitation 3. Statement 1: The Commissioner can estimate the income and expense of a taxpayer. Statement 2: Regressive system of taxation is not allowed in the Philippines due to Inherent Limitation. A. Only statement 1 is true. B. Only statement 2 is true. C. Both statements are true. D. Both statements are false. 4. Statement 1: Facts: During year-end, Nicanor, an independent accountant has determined that his client Inday will save more money if she will opt for 8% optional income tax rather than the graduated tax day initially chose. Nicanor, wanting to impress Inday, filed the Annual ITR using 8% tax rate. Stateplent: Nicanor is wrong. Statement 2: Income of on-line sellers are taxable. A. Only statement 1 is true. B. Only statement 2 is true. C. Both statements are true. D. Both statements are false. 5. Statement 1: Generally, the amount of all items of gross income shall be included in the gross income for the taxable year in which received by the taxpayer. Statement 2: Generally, The deductions shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting the basis of which the net income is computed. A. Only S1 is true B. Only S2 is true C. Both are true D. Both are false

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