Should we rely exclusively on direct taxes for mobilizing tax revenue because indirect taxes are inequitable? Comment.
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- We cannot depend solely on direct taxes because they are progressive in nature and there is possibility of tax evasion.
- 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.
- So, direct and indirect tax are important for providing funds for investment and for other social welfare considerations.
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