The advantages and disadvantages of indirect taxation

Advantages
1. Indirect Taxes are productive of revenue
2. Indirect Taxes are equitable
3. Payment is convenient for the Taxpayer
4. Indirect Taxes do not constitute a disincentive to work
5. Indirect taxes may have a stabilizing effect on the level of income
6. Indirect Taxes are variable and specific (5 marks) Disadvantages
1. Indirect taxes may be regressive
2. Indirect tax may be inflationary
3. Indirect tax may lead to misallocation of resources
4. Indirect tax may affect employment and the viability of industries
5. Indirect tax discriminates between individuals of the same economic standing



Share through

Leave a Reply

Your email address will not be published.