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Tax buoyancy refers to tax revenue growth's responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can imply
- a)There is tax evasion
- b)Growth in the non-taxed part of GDP
- c)Both a and b
- d)Neither a nor b
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Tax buoyancy refers to tax revenue growths responsiveness to changes i...
- Tax buoyancy explains this relationship between Government's tax revenue growth and GDP changes. It refers to the responsiveness of tax revenue growth to GDP changes when a tax is buoyant. Its revenue increases without increasing the tax rate.
- If the output grows and the tax buoyancy is not commensurate, it means one of the following or both: There is tax evasion or growth in the non-taxed part of GDP (Eg: agriculture)
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Tax buoyancy refers to tax revenue growths responsiveness to changes i...
Explanation:
Tax Buoyancy:
Tax buoyancy refers to the responsiveness of tax revenue to changes in GDP. It measures how much tax revenue increases or decreases in response to a change in economic output.
Implications of Non-Proportional Tax Buoyancy:
1. Tax Evasion:
If there is an output growth but the tax buoyancy is not proportional, it can imply tax evasion. This means that individuals or businesses may be underreporting their income or engaging in other illegal activities to avoid paying taxes on the increased income.
2. Growth in the Non-Taxed Part of GDP:
Another implication of non-proportional tax buoyancy is the growth in the non-taxed part of GDP. This could mean that certain sectors of the economy are growing at a faster rate than the taxed sectors, leading to a mismatch between tax revenue and economic output.
Conclusion:
Therefore, if there is an output growth and the tax buoyancy is not proportional, it can imply both tax evasion and growth in the non-taxed part of GDP. This highlights the need for effective tax policies and enforcement mechanisms to ensure that tax revenue grows in line with economic output.
Tax Buoyancy:
Tax buoyancy refers to the responsiveness of tax revenue to changes in GDP. It measures how much tax revenue increases or decreases in response to a change in economic output.
Implications of Non-Proportional Tax Buoyancy:
1. Tax Evasion:
If there is an output growth but the tax buoyancy is not proportional, it can imply tax evasion. This means that individuals or businesses may be underreporting their income or engaging in other illegal activities to avoid paying taxes on the increased income.
2. Growth in the Non-Taxed Part of GDP:
Another implication of non-proportional tax buoyancy is the growth in the non-taxed part of GDP. This could mean that certain sectors of the economy are growing at a faster rate than the taxed sectors, leading to a mismatch between tax revenue and economic output.
Conclusion:
Therefore, if there is an output growth and the tax buoyancy is not proportional, it can imply both tax evasion and growth in the non-taxed part of GDP. This highlights the need for effective tax policies and enforcement mechanisms to ensure that tax revenue grows in line with economic output.
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Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer?
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Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer? for Current Affairs 2025 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer?.
Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer? for Current Affairs 2025 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer?.
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Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Tax buoyancy refers to tax revenue growths responsiveness to changes in GDP. If there is an output growth and the tax buoyancy is not proportional, then it can implya)There is tax evasionb)Growth in the non-taxed part of GDPc)Both a and bd)Neither a nor bCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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