📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Which of the following best describes the principle of

    "Ability to Pay" in taxation?
    A Tax should be levied equally on all individuals. Correct Answer Incorrect Answer
    B Those who receive more government benefits should pay more tax. Correct Answer Incorrect Answer
    C Tax burden should be shared equally, irrespective of income. Correct Answer Incorrect Answer
    D Individuals should be taxed according to their capacity to bear the burden. Correct Answer Incorrect Answer
    E Tax should be levied only on luxury goods. Correct Answer Incorrect Answer

    Solution

    Explanation: The "Ability to Pay" principle is a fundamental concept in taxation which states that taxes should be levied based on an individual's ability to bear the financial burden. This means higher-income earners should contribute more because they can afford to, ensuring fairness and equity in the tax system. It forms the basis of progressive taxation.

    Practice Next
    More Other Laws and Acts Questions
    ask-question