Taxation Principles and Criteria Quiz

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Which of the following is a criterion for a good tax system?

Complexity

Inefficiency

Neutrality (correct)

Unfairness

According to the principle of vertical equity, how should taxes be distributed among individuals?

Everyone should pay the same amount of taxes regardless of income.

People with higher incomes should pay more taxes. (correct)

People with higher incomes should pay lower taxes.

Taxes should be based solely on wealth, not income.

What is the difference between tax avoidance and tax evasion?

Tax avoidance and tax evasion are both legal.

Tax avoidance and tax evasion are both illegal.

There is no difference between tax avoidance and tax evasion.

Tax avoidance is legal, while tax evasion is illegal. (correct)

Which type of tax is levied on transactions involving goods and services?

Indirect tax Signup and view all the answers

According to the benefit principle, who should pay for government-provided goods and services?

Recipients of the benefits should pay for the goods and services. Signup and view all the answers

Which type of tax takes a larger percentage of income from poorer individuals or households?

Regressive tax Signup and view all the answers

What is the main instrument of fiscal policy according to the text?

The annual budget Signup and view all the answers

Which of the following is NOT a main variable of fiscal policy according to the text?

Interest rates Signup and view all the answers

During an economic recession, which of the following actions would be part of an expansionary fiscal policy according to the text?

Increasing government spending Signup and view all the answers

Which of the following is a criterion for good taxes?

Taxes should be easy to collect and difficult to avoid Signup and view all the answers

What does the text state is the budget year in South Africa?

April 1 to March 31 Signup and view all the answers

What does the medium-term budget presented in October offer?

A longer-term view of fiscal policy Signup and view all the answers

Which of the following is NOT a component of the public sector?

Private corporations Signup and view all the answers

What does the abbreviation 'SOEs' stand for in the context of the public sector?

State-Owned Enterprises Signup and view all the answers

Which of the following is NOT a reason for government intervention in the economy, according to the text?

Private initiative and market forces are generally less efficient than government Signup and view all the answers

Which of the following is a criterion for a good tax system, based on the information provided?

The text does not discuss criteria for a good tax system Signup and view all the answers

What is the primary role of local government within the public sector?

Dealing with local issues like sewerage and waste services Signup and view all the answers

Which of the following best describes the composition of the general government, according to the information provided?

Central government + regional/provincial government + local government Signup and view all the answers