1-What Are The Objectives Of VAT, Excise Tax, Custom Duty And TOT? 2-What Are Advantage And Disadvantage Of VAT, Excise Tax Custom Duty And TOT? 3-Can You Tell Me In General About Indirect Taxation?
Answer:
VAT, Excise Tax and Custom Duty are various forms of indirect taxes. They are imposed by the government with the intention of raise the final price of the product. Their prime objective is to reduce the consumption of that specific product. This mechanism is completely simple. Obviously when the price will be high, lesser people will be motivated to buy that item. For example elected representatives imposes taxes on demerit goods for the purpose of discouraging their consumption and eventually reducing their negative impact.
Indirect taxes are those which are not directly levied on the income of any individual or a firm. These taxes are are taken by the public through their consumption. Such taxes are added into the price of the products and therefore when an individual pays for a product, he also have to pay the tax. Some times many populace do not even know that they are paying a large amount of tax in this instrument.
As governmet tax policies is the topic of macro economics, you must open the website www.aw-bc.com.
Objectives of Vat
1. Increase in organization revenue
2. Developing stable source of government revenue
3. To make the tax system more transparent
4. To avoid cascade effect.
5. To reduce tax evasion practices
6. To increase in exports.
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