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Question
During the COVID-19 pandemic, the government reduced the Goods and Services Tax from 12% to 5% on medicines and testing kits. Identify the principle of taxation that is evident in this situation.
During the COVID-19 pandemic, the government reduced the Goods and Services Tax from 12% to 5% on medicines and testing kits. Identify the principle of taxation that is evident in this situation.
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Solution
The correct option is D Canon of elasticity
A government should be able to alter taxes as per the situation of the people and the country. This is known as the canon of elasticity. Reducing the Goods and Services Tax from 12% to 5% on medicines and testing kits is an example. A government should evaluate the economic condition of the country and be flexible with its taxes.
A government should be able to alter taxes as per the situation of the people and the country. This is known as the canon of elasticity. Reducing the Goods and Services Tax from 12% to 5% on medicines and testing kits is an example. A government should evaluate the economic condition of the country and be flexible with its taxes.
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