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What are merits of direct tax as a source of revenue to the government?

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Merits of direct tax as a source of revenue to the government include;

  • May be progressive hence equitable
  • Simple to understand to both taxpayer and tax collector
  • Convenient to both tax payer and tax collector as time for collection is known .
  • Can be used to counter inflation.
  • High revenue earning capacity as it expands naturally with economic growth i.e elastic
  • May be used to redistribute wealth and resources equally.
  • Certain to both tax payer and tax collector.

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