Multiple choice

Which of the following is not a demerit of direct tax?

  1. Unpopular

  2. Inconvenient

  3. Elasticity

  4. Discourage saving and investment
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It is not a demerit of tax, but a merit of direct tax. Direct tax is flexible that is the rate of direct tax can be increased or decreased according to requirements of economy. In case of emergency, the rates of tax can be increased to have larger revenue, and in case of depression the rate of tax can be decreased as the people do not have much to pay.

Keep practicing — related questions