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Questions
Citing reason state the advantage of a direct tax over an indirect tax.
Mention three merits of direct taxes over indirect taxes.
Citing reasons state the superiority of A direct tax over an indirect tax.
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Solution
- Direct taxes cost less to collect than indirect taxes.
- Direct taxes are often progressive, which means they can more effectively reduce income and wealth inequities. Whereas, indirect taxes have a regressive pattern.
- Like indirect taxes, direct taxes are unlikely to cause product price increases.
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