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Questions
Give two reasons why the government imposes tax?
Give two objectives of taxation.
Answer in Brief
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Solution
Objectives of Taxation Policy are:
- The government imposes taxes to raise revenue.
- Taxes are also imposed to reduce inequalities in the distribution of income.
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RELATED QUESTIONS
Taxes in which the rate of tax remains the same, though the tax bases changes are called ______.
The major objective of monetary policy is ______.
The tax whose rate remains unchanged irrespective of the income of the taxpayer is called as ______.
Match the following:
| Column I | Column II | ||
| A. | Impact of tax | (i) | Price stability |
| B. | Incidence of tax | (ii) | Simple to calculate |
| C. | Objective of Monetary Policy | (iii) | Ultimate burden of tax |
| D. | Proportional tax | (iv) | Original imposition of tax |
Define direct tax
Define Indirect tax
Citing reason state the advantage of a direct tax over an indirect tax.
Explain how indirect taxes can be inflationary.
How does the state fulfil the following socio-economic objective?
Reducing income inequality.
Explain how indirect taxes can be made progressive.
