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Questions
What is meant by shifting of tax burden?
Explain the term Shifting of a tax.
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Solution
Shifting of the tax burden is the process by which the person or business legally responsible for paying a tax transfers that burden to another party. This happens when the taxpayer's tax responsibility is passed to someone else, usually through changes in prices or costs.
RELATED QUESTIONS
______ is an example of commercial revenues.
Match the following:
| Column I | Column II | ||
| A. | Direct tax | (i) | Tax rate increases with tax base |
| B. | Indirect tax | (ii) | Tax rate remains constant |
| C. | Proportional tax | (iii) | Imposed on goods and services |
| D. | Progressive tax | (iv) | Impact and incidence lie on the same person |
How can tax be used as an instrument to bring about equitable distribution of wealth and income?
Give two reasons why the government imposes tax?
How does the state fulfil the following socio-economic objective?
Reducing income inequality.
How does the state fulfil the following socio-economic objective?
Promoting industrial growth.
State the four merits of a direct tax.
Explain the following with examples:
Progressive tax
Explain briefly two merits of indirect tax.
Citing reasons state the superiority of Progressive tax over regressive tax.
