It is estimated that half of Egyptian men smoke. This is one of the highest rates in the world. In recent years the Egyptian government has increased the tax on cigarettes. The government and central bank have also tried to reduce inflation and improve Egypt's international trade performance. The Egyptian government could use subsidies to reduce its deficit on the current account of its balance of payments. Identify two qualities of a good tax.
Exam No:0455_m21_qp_22 Year:2021 Question No:4(a)
Answer:
Two from:
• certainty / easy to understand / people know how
much to pay
• convenience / easy to pay
• economy / cheap to collect
• efficiency / not harm performance of markets
• equity / fair / based on ability to pay
• flexibility / easy to change
• certainty / easy to understand / people know how
much to pay
• convenience / easy to pay
• economy / cheap to collect
• efficiency / not harm performance of markets
• equity / fair / based on ability to pay
• flexibility / easy to change
Knowledge points:
4.3.5 principles of taxation
Solution:
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