Which principle of taxation requires taxpayers with equal ability to pay to bear equal tax burdens?
Correct answer: D. Horizontal equity
- A. Administrative convenience
- B. Vertical equity
- C. Tax neutrality
- D. Horizontal equity
Explanation
Horizontal equity means that taxpayers in similar economic circumstances should receive similar tax treatment. Vertical equity concerns how tax burdens differ between taxpayers with different abilities to pay.
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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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