Which of the following is a characteristic of the 'Vertical Equity' principle in taxation?
A. Only equal absolute burdens are fair
B. Taxpayers with greater ability to pay should bear a larger tax burden
C. All taxpayers should pay the same absolute amount
D. Taxes should be independent of income
Answer: Option B
Solution (By JKSSB Mock Tests)
Vertical equity requires that taxpayers with greater ability to pay contribute more in taxes, which is the ethical foundation for progressive taxation.
Explanation:
Non-tax revenue includes interest receipts, dividends and profits from PSUs, fees, fines, etc. Taxes like corporation tax, income tax and customs duty are tax revenues.
Explanation:
Issuing currency notes is the sole prerogative of the Reserve Bank of India. Commercial banks accept deposits, provide loans and create credit.
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