These liabilities are a portion of the tax base, which is collected and comes in different forms, like property, capital gains, income, and sales tax.
What are the 3 Tax Bases?
There are different tax bases, which include economic activity, assets, and income. Here are 3 tax bases that are defined by the Internal Revenue Service (IRS).
- A tax that takes a higher percentage of the higher-income groups than the lower-income groups.
- An equal tax where all the income groups have the same percentage.
- A Tax that takes a higher percentage of lower-income groups than higher-income groups.
Tax Base in India
The tax base in India is very different from the direct or indirect tax. Direct tax includes income tax, property tax, and indirect tax includes taxes from GST, excise duty, and customs duty.
The size and growth of the tax base are very important for the planning centers, state, and local government. It determines taxable revenues and has a direct correlation with the economic condition of the country and the government budget.
The growth and size of the tax base in India are most important for the planning of the local, state, and central governments. It also influences the tax revenues that are available to the government. A tax base is the direct correlation between the economic condition of the country and the government budget.
Broaden the Tax Base
The broader tax base means that the tax is increasing by the revenue due to the expansion of the income levels and the assets that are subject to taxation, apart from making the tax rates high.
A tax base can be broad or narrow, which depends on the number of people who are related to the jurisdiction and are subject to the tax in a country. Most states have a sales tax that is narrow, which includes daily expenses like food and medicines.
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