What are the two main ways governments can raise money?

The two main ways Governments can raise money are through levying indirect taxes and direct taxes. Direct taxes are levied on companies, individuals. Indirect taxes are levied on sale of goods and services. You can read about the Tax Administration Reform Commission (TARC) – Mandate, Report, Recommendations in the given link.

GST is one the major sources of revenue for the Government of India. Individual tax, corporation tax, costumes and duties are other major sources of Government revenue. 

Further readings:

  1. Tax Policy Council & Tax Policy Research Unit: Notes for UPSC
  2. Taxation in India – Direct taxes & Indirect Taxes, Features of Taxation System

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