Major benefits or advantages of indirect taxes can be pointed as follows:
1. Convenient To Pay
Indirect taxes are imposed while purchasing goods or services. Taxes are already added in the price of the product. So, the 'Pre-coated' tax makes convenience to both the tax payer and the administration.
2. Broad Based
Since tax is wrapped up in the price of goods and services they are imposed on all people (i.e rich, poor, young, old etc.). So, indirect taxes have wider scope than direct taxes.
3. Economical
These taxes are easy to collect. It takes less effort, less time and less cost to collect tax. So, indirect taxes are economical in nature.
4. Flexibility
Indirect taxes are more flexible than direct taxes. Tax rates can be easily changed by the authority as per the nation's requirement.
Also Read:
Also Read:
5. No Tax Evasion
As we know that taxes are included in the purchase price of the product, there is no chance of tax evasion.
6. Limits Harmful Consumption
Harmful products such as tobacco, alcohol and intoxicants are heavily taxed by the state. It helps to limit the consumption of such products.
