Question

Question 3: The two fundamental tax principles are [5 pts]

O Direct taxes and indirect taxes

O Tax morality and tax neutrality

O Income tax and withholding tax

O Income tax and value added tax

Question 4: Tax havens and international offshore financial centers are [5 pts]

O Located in every financial centers and small islands around the world.

O Located in countries that have a low corporate tax rate, unstable currency and stable government.

O Located in countries that have no corporate tax rate, a stable currency and stable government.

O Located in countries that have a low corporate tax rate, a stable currency and stable government.

Question 5: Nations structure their tax systems along two basic approaches: [5 pts]

O The global approach and the national approach

O The global approach and the territorial approach

O The worldwide approach and the territorial approach

O The worldwide approach and the local approach

Answer 1

3.As we know that fundamental principle of Tax Principle is explained by father of economics Adam smith'

According to Adam smith following are the Principle of Taxes;

1.Certainty-Ever person should clear how much he pay tax on certain income.That means an individual or firm or company know with certainty how much they pay in certain income.

2.Equality-Tax should be equal to all citizen.

3.Conveniance-Tax must be conveniance to pay so the taxpayer should not feel dificult to pay.So tax should be collected in manner that no one escape from it and same time it is easy to pay.

4.Economy-Tax should be focussed on development of society.

By analysing the tax principal theory given by Adam smith it is clear that Tax morality and tax neutrality is two fundamental tax principles.Tax morality explain the willingness of individual to pay tax and tax neutrality explain that the tax policy should be netural and charged to a person on the basis of their economic position.

Direct taxes and indirect taxes are types of taxes.Where direct tax is tax which is paid by assessee directly to government.Income tax and wealth tax are type of direct tax.Indirect tax means incidence of tax falls on one person but impact falls on other person.Gst custom are covered under indirect tax.

Income tax and withholding tax are not a tax principle.Income tax covered under direct tax while withholding tax means income deducted by employer from employee wages for income tax purposes.

Income Tax and Value added tax is not tax principle.Income tax covered under direct tax while value added tax covered under indirect tax.