Which feature makes an income tax progressive?
Correct answer: D. The tax rate rises as taxable income rises
- A. The tax is charged only on imported goods
- B. The tax rate remains fixed for every taxpayer
- C. The tax rate falls as taxable income rises
- D. The tax rate rises as taxable income rises
Explanation
A progressive tax applies higher rates to higher levels of taxable income. A fixed rate is proportional taxation, while a tax on imported goods is generally a customs or indirect tax.
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About Taxation
Taxation covers the principles used to assess and collect taxes from individuals, businesses and transactions, with emphasis on income tax and sales tax concepts in Pakistan. Questions involve taxable income, exemptions, deductions, tax liability, withholding, returns, assessment, tax avoidance versus evasion, and the distinction between direct and indirect taxes.
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50 free Taxation MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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