If Mr. A earns N2.000 a year while Mr. B earns N8000 but ...
If Mr. A earns N2.000 a year while Mr. B earns N8000 but Mr. A pays N200 in tax per annum while Mr. B pays N400, such tax is______
Progressive
Proportional
Indirect
Regressive
Correct answer is D
A regressive tax is a tax that takes a larger percentage of income from low-income groups than from high-income groups.
From the illustration in the question, Mr. A is charged 10% for tax per annum (ie, 0.1 x 2000 = 200) while Mr. B who earns higher than Mr. A is charged 5% (ie, 0.05 x 8000 = 400)
This means the taxing system is regressive, where a low-income earner, is paying a higher percentage of their income as tax while someone who earns more than double that amount is charged a lesser percentage.
The concept of opportunity cost is also referred to as ...
Disposable income is an income which ...
An important feature of a cartel is that ...
One of the internal economies of large scale production is ...
Which of the following is the normal channel by which the commodities reach the final consumer? ...
Part-time workers who desire full-time employment are: ...
One of the major functions of money is? ...
In market economy, the question of what, how and for whom to produce are solved by the ...