Should we rely exclusively on direct taxes for mobilizing tax revenue

1.	Should we rely exclusively on direct taxes for mobilizing tax revenue because indirect taxes are inequitable? Comment.
Answer» 1. We cannot depend solely on direct taxes because they are progressive in nature and there is possibility of tax evasion. 2. But as against it indirect taxes are proportional in nature and are generally imposed on commodities (necessity goods etc.) which each and every individual purchase. 3. So, direct and indirect tax are important for providing funds for investment and for other social welfare considerations.

Should we rely exclusively on direct taxes for mobilizing tax revenue because indirect taxes are inequitable? Comment.

Answer»

1. We cannot depend solely on direct taxes because they are progressive in nature and there is possibility of tax evasion.

2. But as against it indirect taxes are proportional in nature and are generally imposed on commodities (necessity goods etc.) which each and every individual purchase.

3. So, direct and indirect tax are important for providing funds for investment and for other social welfare considerations.

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Should we rely exclusively on direct taxes for mobilizing tax revenue because indirect taxes are inequitable? Comment.

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