Indirect Taxes are difficult to evade

Indirect taxes are levied on goods and services, and are included in the price of goods and services. They are collected by intermediaries, such as retailers, and then passed on to the government. Indirect taxes are difficult to evade because:

1. Inclusive in price: Indirect taxes are included in the price of goods and services. This means that consumers do not have to pay the tax separately. It also means that the tax is collected by intermediaries, such as retailers, who have to pay the tax to the government. This reduces the chances of evasion.

2. Large base: Indirect taxes are levied on a large base of goods and services. This means that there are many different types of goods and services that are subject to tax. This makes it difficult for people to avoid paying the tax.

3. Monitoring: Indirect taxes are easier to monitor than direct taxes. This is because they are collected by intermediaries, such as retailers, who are required to maintain records and submit regular returns to the government. This makes it easier for the government to track tax payments and identify cases of evasion.

Conclusion

Overall, indirect taxes are difficult to evade because they are inclusive in price, have a large base, and are easier to monitor than direct taxes. This makes them an effective tool for governments to raise revenue and fund public services.