Question

Identify the merit of direct tax from the following:

Options

• Tax evasion

• Greater cost of collection

• Ensuring equity

• Inconvenient

Answer 1

Ensuring equity

Explanation:

The progressive nature of direct tax is a significant advantage. Because of its progressive nature, it is sometimes viewed as encouraging equity and social justice by putting a heavier burden on those who can pay it more easily while providing relief to those with lesser earnings.