The state and Economic development

The state and Economic development

Demerits of Indirect tax

1. Regressive
2. No civic consiousness
3. Uncertain
4. Discourage savings
5. Inflationary

Multiple Choice

Indirect tax creates no civic consiousness because...

• tax payers are not conscious of its payment

• It is paid in small amounts

• It does not have a wide coverage

Multiple Choice

Indirect tax is infationary in nature because...

• it increases the prices of goods and services

• It does not create civic consciousness

• it discourages savings

Other kinds of taxes

1. Proportional
2. progresive
3. Regressive
4. Degressive

Open Ended

Tax base T1 T2 T3

10,000 10% 2% 5%

20,000 10% 3% 3%

30,000 10% 5% 2%

40,000 10% 5% 1%

Open Ended

Role of taxation policy

Fill in the Blank

Two kinds of taxes are direct tax and

Multiple Select

If the tax is levied on one person but paid by another person, it is called ...

• Direct tax

• Indirect tax

Difference between direct and indirect tax

Multiple Choice

A tax imposed on goods and services is generally

• direct tax

• indirect tax

Multiple Select

A tax in which the burden cannot be shifted to another is called

• direct tax

• indirect tax

Merits of diect tax

1. Economy
2. Equity
3. Certainty
4. Elasticity
5. Civic consciousness
6. Reduction in inequality

Demerits of direct tax

1. Unpopoular
2. Inconvenience
3. Possibility of evation
4. Arbitrary
5. Narrow in scope

Multiple Choice

Why is direct tax unpopular

• because it is narrow in scope

• because it has to be paid in lumpsum

• because there is a possibility of evasion

Multiple Choice

Why does direct tax creates civic consiousnes ?

• because people are more aware of the payment

• because there is more equity

• because there is possibilty of evasion