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Question

Indirect taxes are not favoured because they are ___________.

A
a severe burden on the wealthy
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B
not helpful in mobilising enough financial resources
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C
regressive
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D
not easy to collect
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Solution

The correct option is C regressive
Indirect tax is that tax which is levied on goods or services produced or purchased.
Indirect taxes are those which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another.
It is that tax where the burden can be shifted to another person. Indirect taxes are not favoured because they are regressive as a large amount is taken from those who have lower incomes.

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