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Which of the following best describes the term 'Tax Expenditure'?
- a)It is the cost incurred by the government in collecting the taxes.
- b)The amounts of the tax revenue spent by the government on social services.
- c)The revenue lost due to tax evasion by the companies.
- d)It is concessions given in taxes by tax exemption or lower taxes.
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Which of the following best describes the term Tax Expenditure?a)It is...
Tax expenditure refers to the concessions given in taxes by tax exemption or lower taxes. It is an estimate of the revenue that the government would have collected if all taxpayers were subject to the same tax rate, and if all income was taxed at the same rate.
Definition of Tax Expenditure
Tax expenditure is not a direct expenditure of the government, but rather a reduction in revenue that is similar to a direct expenditure. Tax expenditure can be defined as the revenue that the government loses because of special tax provisions or exemptions that benefit certain groups or activities.
Examples of Tax Expenditure
Some examples of tax expenditure include tax credits, exemptions, and deductions that are given to specific industries, such as agriculture or energy. Tax expenditure can also take the form of tax breaks for individuals, such as the mortgage interest deduction or the tax-free status of employer-provided health insurance.
Importance of Tax Expenditure
Tax expenditure is an important concept in tax policy, as it can be used to evaluate the fairness of the tax system. By identifying tax expenditures, policymakers can determine whether certain groups or activities are receiving preferential treatment through the tax code. This can help to guide decisions about tax reform and ensure that the tax system is equitable and efficient.
Conclusion
In conclusion, tax expenditure refers to the revenue lost due to tax exemptions or lower taxes. It is an important concept in tax policy and can help policymakers evaluate the fairness and efficiency of the tax system.
Definition of Tax Expenditure
Tax expenditure is not a direct expenditure of the government, but rather a reduction in revenue that is similar to a direct expenditure. Tax expenditure can be defined as the revenue that the government loses because of special tax provisions or exemptions that benefit certain groups or activities.
Examples of Tax Expenditure
Some examples of tax expenditure include tax credits, exemptions, and deductions that are given to specific industries, such as agriculture or energy. Tax expenditure can also take the form of tax breaks for individuals, such as the mortgage interest deduction or the tax-free status of employer-provided health insurance.
Importance of Tax Expenditure
Tax expenditure is an important concept in tax policy, as it can be used to evaluate the fairness of the tax system. By identifying tax expenditures, policymakers can determine whether certain groups or activities are receiving preferential treatment through the tax code. This can help to guide decisions about tax reform and ensure that the tax system is equitable and efficient.
Conclusion
In conclusion, tax expenditure refers to the revenue lost due to tax exemptions or lower taxes. It is an important concept in tax policy and can help policymakers evaluate the fairness and efficiency of the tax system.
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Which of the following best describes the term Tax Expenditure?a)It is...
Tax Expenditure refers to the opportunity cost of taxing at concessional rates, or the opportunity cost of giving exemptions, deductions, rebates, deferrals credits, etc., to the taxpayers. Tax expenditures are also termed as revenue foregone. Tax expenditures indicate how much more revenue could have been collected by the government if not for such measures. In other words, it shows the extent of indirect subsidy enjoyed by the taxpayers in the country.
Therefore, the correct answer is (d).
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Which of the following best describes the term Tax Expenditure?a)It is the cost incurred by the government in collecting the taxes.b)The amounts of the tax revenue spent by the government on social services.c)The revenue lost due to tax evasion by the companies.d)It is concessions given in taxes by tax exemption or lower taxes.Correct answer is option 'D'. Can you explain this answer?
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Which of the following best describes the term Tax Expenditure?a)It is the cost incurred by the government in collecting the taxes.b)The amounts of the tax revenue spent by the government on social services.c)The revenue lost due to tax evasion by the companies.d)It is concessions given in taxes by tax exemption or lower taxes.Correct answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following best describes the term Tax Expenditure?a)It is the cost incurred by the government in collecting the taxes.b)The amounts of the tax revenue spent by the government on social services.c)The revenue lost due to tax evasion by the companies.d)It is concessions given in taxes by tax exemption or lower taxes.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following best describes the term Tax Expenditure?a)It is the cost incurred by the government in collecting the taxes.b)The amounts of the tax revenue spent by the government on social services.c)The revenue lost due to tax evasion by the companies.d)It is concessions given in taxes by tax exemption or lower taxes.Correct answer is option 'D'. Can you explain this answer?.
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