PRC-3 · Chapter 16 · Question 2 of 20
A consumer buys a television at an electronics store. The price includes a 17% General Sales Tax (GST) that the store collects and forwards to the government. Because the consumer ultimately pays it but the store remits it, this is a(n):
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Indirect tax
Explanation
An indirect tax is levied on goods and services rather than directly on income. The burden can be shifted (the store is taxed, but passes the cost onto the consumer).
More Public Finance MCQs
- Q4When the government's total planned expenditures for the upcoming financial year significantly exceed its total expected tax revenues, the…
- Q5Which of the following is the defining characteristic of a 'Direct Tax' (such as corporate tax or personal income tax)?
- Q6The government enforces a tax system where a person earning Rs. 50,000 pays 5%, but a person earning Rs. 1 million pays 35%. This system…
- Q7A consumer buys a television. The price includes a 17% General Sales Tax (GST) that the electronics store collects and passes to the…
- Q8During a severe economic crash, the Ministry of Finance significantly reduces income taxes and spends billions building public railways to…