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An indirect tax is not always equitable. Give two reasons to support your answer. 

Asked by Topperlearning User 27th April 2015, 1:44 PM
Answered by Expert

An indirect tax is not always equitable because :

  1. Since each individual pays the same rate on their purchases; the poor pay a larger proportion of their incomes.
  2. Indirect taxes are levied on the commodities which only the rich people consume and by limited people. It brings in very less tax revenue for the government. Therefore, the government has to impose taxes on a wide range of commodities.
Answered by Expert 27th April 2015, 3:44 PM
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