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Objectives of indirect taxes

Indirect taxes are implemented in many countries and there are certain objectives to it:

  • Broadening of tax base:

It enables to broaden the tax net this helps to reach the mass that are into direct tax liabilities. Through broadening process, government has the opportunity to rise up resources for improved public spending.

  • Increase in consumption:

When you get to communicate with effect of indirect taxes on industries assignment help experts, you will understand that it is the best way through which high marginal propensity can be curbed to improve consumption.

  • Minimizing inequalities:

In order to minimize the inequalities in consumption in taxing items it is necessary to focus on indirect taxes.

Purpose of indirect taxes

The main purpose of indirect taxes is:

  • Generate more tax revenue for government.
  • Discourage the consumption of any harmful products.
  • Encouraging consumption of good products.

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There are two types of indirect taxes:

The main advantage of valorem tax is that the revenue to government can increase automatically in case the economy rises.

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