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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
The government imposes tax ______.
Define Indirect tax
Differentiate between direct and indirect taxes.
To which tax is this shifting of tax burden relevant?
Classify the following type of tax into direct and indirect taxes:
Sales tax
Give one example of progressive tax.
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
Explain clearly tour ways by which the state can promote economic growth and development.
How does the state fulfil the following socio-economic objective?
Environmental protection.
State two differences between income tax and commodity tax.
