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WAEC Economics 2008 Question 43

Question 43

Public Finance

A tax which is expressed as a given absolute sum of money per unit of a commodity is known as

  1. A.a specific tax
  2. B.a direct tax
  3. C.an indirect tax
  4. D.a value added tax.
Show the answer and explanation

Answer: A (a specific tax)

Explanation

A specific tax is a fixed amount per unit (e.g. N10 per litre), unlike an ad valorem tax based on value.