Question 45
Public FinanceTax avoidance best refers to attempts by a tax payer to
- A.always seek for tax holidays during which he will not pay tax.
- B.conceal income deliberately thereby paying no tax.
- C.escape illegally from the tax net thereby paying no tax at all.
- D.legally exploit the loopholes in tax laws to pay less tax.
Show the answer and explanation
Answer: D (legally exploit the loopholes in tax laws to pay less tax.)
Explanation
Avoidance is legal use of loopholes; illegal escape is tax evasion.