Explain four reasons why a country might prefer a multiple tax system over a single tax system

Explain four reasons why a country might prefer a multiple tax system over a single tax system

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i. Sufficient Revenue
A government implementing a multiple tax system is able to collect sufficient revenue due to a wide tax base
ii. Desire to regulate externalities
A country implementing a multiple tax system will be in a position to regulate externalities whenever they arise e.g. a country may impose heavy import duty to protect local industries
iii. Minimize incidences of tax evasion
Since a multiple tax system has a wide tax base it is able to minimize tax evasion by bring every taxable person to the tax blanket

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Wilfykil answered the question on February 13, 2019 at 08:30

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