advantages of direct tax and indirect tax(10 mark) pls help me tommorow exam
Answers
Explanation:
Advantages of Direct Taxes
Though it is strictly implemented on every individual who does not qualify for an exemption, there are actually numerous advantages of paying taxes directly. They include:
1. Promotes equality
Since direct taxes are based on the ability of a person to pay, it promotes equality among payers and citizens. Every person is charged a different amount, depending on how much they make.
2. Promotes certainty
The good thing about direct taxes is that they are determined and made final before they are even paid. In the case of income tax, the annual tax is the same for every year, for as long as the salary does not change.
3. Promotes elasticity
Taxes are the earnings of the government, and when they fluctuate, the earnings also change. It can go higher or lower.
4. Saves time and money
The government does not need to spend on the collection of taxes because they are already taken right at the source of the income. Some companies use automatic payroll deduction systems, which help save time and money.
Answer:
Advantages of Direct Taxes
1. Promotes equality
Since direct taxes are based on the ability of a person to pay, it promotes equality among payers and citizens. Every person is charged a different amount, depending on how much they make.
2. Promotes certainty
The good thing about direct taxes is that they are determined and made final before they are even paid. In the case of income tax, the annual tax is the same for every year, for as long as the salary does not change.
3. Promotes elasticity
Taxes are the earnings of the government, and when they fluctuate, the earnings also change. It can go higher or lower.
4. Saves time and money
The government does not need to spend on the collection of taxes because they are already taken right at the source of the income. Some companies use automatic payroll deduction systems, which help save time and money.
Advantages of Indirect Taxes
1. The poor can do their share
Unlike direct taxes that usually exempt the poor, indirect taxes allows them to actually contribute their part in collecting funds for a country or state.
2. They aren’t very obvious
Indirect taxes, as they are incorporated in the sale price of an item, are not very obvious. People don’t feel they are being taxed simply because the tax comes in small values. Plus, add the fact that they are not indicated in the price tag but can only be seen in the purchase receipt. Also, they can be avoided by not buying the goods.
3. Collection is easy
Unlike direct taxes where documents need to be accomplished and filing is required, indirect taxes are paid the moment a consumer buys a product. The tax is collected by the supplier and is paid to the government.
4. Discourages consumption of harmful products
Alcohol and cigarettes are being taxed, that’s why their prices go up. By taxing such products, people are turned off by their price, thereby saving them from consuming harmful items.
Explanation:
I think that's enough