Question

State two merits of direct taxes.

Answer 1

Merits of direct taxes:

1. Economical: Because the expense of collecting direct taxes is low, they are a cost-effective choice for the government.
2. Certainty: Direct taxes are guaranteed because the taxpayer knows how much tax he owes and when it is due, allowing him to plan his income and expenses accordingly. The government also knows how much tax revenue it will receive in advance and may adjust its income and expenditure accordingly.