GENERAL PRINCIPLES OF TAXATION EXAM WITH

GENERAL PRINCIPLES OF TAXATION EXAM 2024/2025 WITH

COMPLETE SOLUTIONS

TAXATION AS STATE POWER - Correct Answer Inherent power of the State to enforce a proportional contribution from its subjects for public purpose PRINCIPLES OF A SOUND TAX SYSTEM - Correct Answer a. Fiscal adequacy.

• Equality or theoretical justice.
• Administrative feasibility.

Fiscal Adequacy - Correct Answer Revenue must be sufficient to meet the demands of public expenditures.Theoretical Justice - Correct Answer Based on ability to pay; progressive (ability-to-pay principle).Administrative Feasibility - Correct Answer Capable of convenient, just and effective administration.Characteristics of the states power to tax (ILS) - Correct Answer Inherent in sovereignty - maybe exercised although not expressly granted by the constitution.Legislative in character - only the legislature can impose taxes.Subject to constitutional and inherent limitations - not an absolute power that can be exercised by the Government.PRIMARY PURPOSE OF TAXATION - Correct Answer To raise revenue to finance government expenditures.Limitations on power of taxation - Correct Answer a. Constitutional Limitations

• Inherent Limitations 1 / 2

Constitutional Limitation - Correct Answer Limitations which are found in the constitution.Inherent Limitation - Correct Answer Limitations not found in the constitution but inherent at the beginning of the State.Inherent limitations (PENTI) - Correct Answer a. levied for public purpose.

• exemption from taxation of government entities.
• non-delegation of legislative power to tax.
• territorial.
• international comity.

Constitutional Limitations - Correct Answer 1. observance of due process of law.

• equal protection of the law.
• uniformity in taxation.
• progressive scheme of taxation.
• non-imprisonment for non-payment debt or poll tax.
• non-impairment of obligation and contract.

Constitutional Limitations (cont 1) - Correct Answer 7. free worship rule.

• non-appropriation of public funds or property for the benefit of any church, sect or

system of religion.

• exemption of religious, charitable or educational entities, non-profit cemeteries, churches and

mosque from property taxes.

• exemption from taxes of the revenues and assets of non-profit, non-stock educational institutions

including grants, endowments, donations or contributions for educational purposes.Constitutional Limitations (cont 2) - Correct Answer 11.concurrence of a majority of all members of Congress for the passage of a law granting tax exemption

• / 2