Advantages of indirect taxes, Managerial Economics

Advantages

a. They are less costly to administer because the producers and sellers themselves deposit them with the government.

b. If levied on goods with inelastic demand with respect to price rises, it will result in high revenue collection.

c. Indirect taxes reach the pockets of all income groups.  Thus, they have a wide coverage, and every consumer pays to the state exchequer according to his ability to pay.

d. They can check on the consumption of harmful goods like wine, cigarettes and other toxicants.

e. Can be used as a powerful tool for implementing economic policies by the government.  If the government wants to protect domestic industries from foreign competition, it can levy heavy import duties.  This will help to develop domestic industries.  If the government wants to encourage one industry on a priority basis, it may not levy any taxes on its products but continue the taxes imposed on other industries.  The government may do so in order to encourage, a particular technology or employment in a particular industry.

Posted Date: 11/30/2012 3:11:42 AM | Location : United States







Related Discussions:- Advantages of indirect taxes, Assignment Help, Ask Question on Advantages of indirect taxes, Get Answer, Expert's Help, Advantages of indirect taxes Discussions

Write discussion on Advantages of indirect taxes
Your posts are moderated
Related Questions
What do you mean by the fiscal policy? What are the instruments of fiscal policy? Briefly comment on India's fiscal policy.

Disguised unemployment Situation where some people are employed apparently, but if they are withdrawn form this job, total production remains the same. In most developing coun


determinants of price expectation of elasticity

Q. Explain Supernormal Equilibrium? Supernormal Equilibrium: E is the point of stable equilibrium as MC = MR and MC cuts the MR from below.   Figure: Supernormal Equ

It is presumed that every of the different combinations of capital and labour displayed in Table produces the same level of output, which is, 20 units. Combinations are such that i

What is identity economics? How does identity economics help to explain economic questions that standard economics fails to address?

Peanut butter monopolist Calvé supplies peanut butter to Albert Heijn in an isolated village. The supermarket is a monopolist in the village. Demand for peanut butter is given by:

Describe the Application of economic theories Pertinent business decisions necessitate an unambiguous understanding of the environmental and technical conditions under which bu

Determine Optimal Price, Quantity and Economic Profit A firm has a demand function P = 200 – 5Q and cost function: AC=MC=10 and a potential entrant has a cost function: AC=MC=20