Home > Economics Questions and Answers > Which two of the following taxes are indirect taxes?
Which two of the following taxes are indirect taxes?
A
Sales-tax and Income-tax
B
Income-tax and Wealth-tax
C
Sales-tax and Excise duty
D
Income-tax and Excise duty
Correct Answer:
C
Sales-tax and Excise duty
- Sales Tax and Excise Duty are examples of indirect taxes.
- Indirect taxes are collected by intermediaries, such as sellers or manufacturers, and then paid to the government.
- The burden of these taxes can be shifted from one person to another.
- Sales Tax is charged on the sale of goods and is ultimately paid by consumers.
- Excise Duty is levied on the manufacture or production of goods within the country.
- In contrast, Income Tax is a direct tax paid directly by the person earning the income.
- Wealth Tax was also a direct tax imposed on the net wealth of individuals and entities.
- Therefore, Sales Tax and Excise Duty are the two indirect taxes among the given options.