All indirect taxes tend to be

Assessment: WAEC SSCE - Economics - 2008 (Objective) Subject: Economics

Question 1 Report

All indirect taxes tend to be

Answer Details
Indirect taxes tend to be regressive. This means that as income increases, the proportion of income paid in taxes decreases. Indirect taxes are usually levied on goods and services, such as sales tax or value-added tax (VAT), which are included in the price of the goods or services. As a result, everyone pays the same tax on the same goods or services, regardless of their income level. This tends to affect lower-income individuals more as they spend a larger proportion of their income on these goods and services compared to higher-income individuals. As a result, indirect taxes are considered to be regressive.

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