State any two advantages of indirect taxes.
Merits of Indirect Tax:
Indirect taxes have the following advantages:
(a) Convenience:
Indirect taxes are less inconvenient and burdensome to the taxpayer than the direct taxes. Since taxes are included in the price of the taxed commodity the taxpayer does not feel the burden of the taxes. It is convenient also because these taxes are not paid in lump-sum amount unlike direct taxes.
Sometimes, the consumer may not be aware of the fact that he pays tax. Above all, an indirect tax cam be avoided by not buying taxed commodities. But, once a taxpayer crosses the threshold limit, he or she will have to pay direct taxes. For all these reasons, indirect taxes are both convenient and burden-free.
(b) Broad-Based:
Indirect taxes are broad- based since the effects are felt by more or less all the people in the community. Direct tax, on the other hand, has a narrow base. The lower income group is not required to pay income tax but he cannot escape the indirect tax net once he purchases a tax-imposed commodity.
Merits of Indirect Tax:
Indirect taxes have the following advantages:
(a) Convenience:
Indirect taxes are less inconvenient and burdensome to the taxpayer than the direct taxes. Since taxes are included in the price of the taxed commodity the taxpayer does not feel the burden of the taxes. It is convenient also because these taxes are not paid in lump-sum amount unlike direct taxes.
Sometimes, the consumer may not be aware of the fact that he pays tax. Above all, an indirect tax cam be avoided by not buying taxed commodities. But, once a taxpayer crosses the threshold limit, he or she will have to pay direct taxes. For all these reasons, indirect taxes are both convenient and burden-free.
(b) Broad-Based:
Indirect taxes are broad- based since the effects are felt by more or less all the people in the community. Direct tax, on the other hand, has a narrow base. The lower income group is not required to pay income tax but he cannot escape the indirect tax net once he purchases a tax-imposed commodity.
