On 1 July 2017, several of the indirect taxes were merged together to form the Goods and Services Tax. Identify the problems with indirect taxes.

Difficulty in managing different kinds of taxes

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Less revenue

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Increase in the final prices of goods and services

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Decrease in the final prices of goods and services

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Solution

The correct option is C Increase in the final prices of goods and services
Indirect taxes were the predominant source of revenue compared to direct taxes. However, indirect taxes had many drawbacks. The wide variety of indirect taxes made it difficult to manage the different kinds of taxes. Moreover, with so many taxes at different levels, the final price of goods got unnecessarily higher.

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