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    Question

    Which one of the following term is used when the tax

    rate increase with increase in the level of income and vice versa?
    A Proportional taxation Correct Answer Incorrect Answer
    B Digressive taxation Correct Answer Incorrect Answer
    C Regressive taxation Correct Answer Incorrect Answer
    D Progressive taxation Correct Answer Incorrect Answer

    Solution

    In a progressive tax system, the tax rate is designed to increase as the income level of an individual or entity increases. This means that individuals with higher incomes will pay a higher proportion of their income in taxes compared to those with lower incomes.

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