1. Simplicity: Direct taxes can be straightforward and easier to understand compared to indirect taxes. They are typically based on income or wealth, making it simpler for individuals or businesses to calculate and pay their tax liabilities.
2. Progressivity: Direct taxes often follow a progressive tax structure, meaning that as individuals or businesses earn higher incomes or accumulate more wealth, they are taxed at higher rates. This progressive nature of direct taxes helps to reduce income and wealth inequality within a society.
3. Economic efficiency: Direct taxes can be designed to have a minimal impact on economic decisions and incentives. Since they are typically levied directly on individuals or businesses, there is less distortion or alteration of market behavior, resulting in greater economic efficiency and productivity.
4. Ability to target specific groups: Direct taxes provide the opportunity to target specific groups or individuals that have the ability to pay higher taxes or contribute more to public revenue. This allows for a more equitable distribution of the tax burden based on income or wealth disparities, thus promoting fairness and social justice.
Highlight four advantage of direct tax
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