Define tax revenue. What are the two kinds of tax revenues? Give two examples of each.

Question 8. Define tax revenue. What are the two kinds of tax revenues? Give two examples of each.
Class  Class 12
Subject Economics (Macroeconomics)
Category Class 12 Economics Solutions Sandeep Garg

Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Short Questions Q.8 Define tax revenue. What are the two kinds of tax revenues? Give two examples of each.

Solution:-

Tax is a compulsory payment to the Government imposed on citizens and corporates of a country by Law, in order for the Government to meet its expenditures. Two kinds of tax revenues are: –




  1. Direct tax revenue: – Direct Taxes are those taxes which are levied on and the burden to pay is on the same person or corporate. The Burden to pay a direct tax cannot be shifted on another person. Examples of Direct taxes are Income Tax, Corporate Tax, Wealth Tax etc.
  2. Indirect Tax revenue: – Indirect taxes are those revenue receipts for the government in which burden to pay can be shifted. In other words, the person on whom tax is levied and the person who ultimately bears the brunt of tax are different. Example, GST and excise duty.

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