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प्रश्न
An indirect tax is not always equitable. Give two reasons to support your answer.
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उत्तर
An indirect tax is often considered not always equitable for the following two reasons:
- Burden on low-income groups: Indirect taxes, such as sales tax or VAT, apply to all individuals, regardless of income level. This means that low-income people pay the same tax rate as high-income people for products and services. As a result, a more significant proportion of their income is used to pay these taxes, increasing their tax burden.
- Indirect taxes do not account for the taxpayer's ability to pay. Since everyone pays the same rate, these taxes make no difference between those who can afford to pay more and those who cannot.
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संबंधित प्रश्न
Which of the following is an advantage of direct taxes?
Instruments of fiscal policy is:
Observe the relationship of the first pair of words and complete the second pair:
Tax paid by person on whose it is imposed : Direct tax.
A tax is paid by some person and the final burden is born by some other person : ______.
Which of these taxes is most likely to be progressive?
Wealth tax is an example of:
Define direct tax
Classify the following type of tax into direct and indirect taxes:
Income tax
Classify the following type of tax into direct and indirect taxes:
Sales tax
What are progressive taxes.
How does the state fulfil the following socio-economic objective?
Environmental protection.
