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What is Tax expenditure?
  • a)
    One-time expenditure by Government to increase the tax base in the country.
  • b)
    Amount spent on to improve tax-GDP ratio.
  • c)
    Government expenditure from the tax revenues.
  • d)
    Ratio of total tax revenue collected to the aggregate tax base
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
What is Tax expenditure?a)One-time expenditure by Government to increa...
The divergence between the statutory tax rate and effective tax rate (defined as the ratio oftotal tax revenue collected to the aggregate tax base) is mainly on account of tax exemptions.Tax expenditure is also termed as ‘revenue forgone’, but it does not necessarily imply that thisquantum of revenue has been waived by the government.
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What is Tax expenditure?a)One-time expenditure by Government to increase the tax base in the country.b)Amount spent on to improve tax-GDP ratio.c)Government expenditure from the tax revenues.d)Ratio of total tax revenue collected to the aggregate tax baseCorrect answer is option 'D'. Can you explain this answer?
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