McqMate
| Q. |
Indirect tax means : |
| A. | there is not direct relationship between the tax payer and the government. |
| B. | direct relationship between tax payer and the government. |
| C. | tax base is income |
| D. | the incidence and impact are on the same person on whom tax is imposed. |
| Answer» A. there is not direct relationship between the tax payer and the government. | |
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Explanation: The term indirect tax has more than one meaning. In the colloquial sense, an indirect tax (such as sales tax, a specific tax, value added tax (VAT), or goods and services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer). The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by government from the persons (legal or natural) on which it is imposed. |
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