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WAEC Economics 2010 Question 40

Question 40

Public Finance

One disadvantage of direct taxes is that they

  1. A.allocate scarce resources.
  2. B.are not rigid.
  3. C.can be progressive.
  4. D.can be evaded.
Show the answer and explanation

Answer: D (can be evaded.)

Explanation

People can under-declare income to avoid paying direct taxes.