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JAMB Economics 1986 Question 40

Question 40

Public Finance

Tax incidence is the analysis of

  1. A.how progressive a tax is
  2. B.how a tax is collected
  3. C.how distorting a tax is
  4. D.who ultimately pays the tax.
Show the answer and explanation

Answer: D (who ultimately pays the tax.)

Explanation

Incidence of a tax is about who finally bears the burden of the tax, which may differ from who hands it to the government.