Multiple choice

Which of the following statements is not true about the impact of tax?

  1. It refers to the initial burden of tax.

  2. It can be easily shifted.

  3. It cannot be shifted.

  4. It is upon the person who pays it in the first instance.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This statement is not true about impact of tax. The impact of tax can be shifted in case of indirect tax. For instance, the custom duty is to be paid to the government by the importer of commodity, but is shifted to the ultimate consumer as it is charged from the consumer by including in the price. Thus, the impact of tax can be shifted.

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