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Question

Difficulty: EasySources of Government Revenue

Which of the following revenue sources of the government is classified as a direct tax?

  1. Personal income taxAnswer
  2. B
    Customs duties
  3. C
    Mining royalties
  4. D
    Court fees

Answer

Personal income tax
Personal income tax is assessed directly on wages, salaries, and personal earnings, making it a primary form of direct tax revenue for the government.

Step-by-Step Solution

1
Define direct taxation in public sector accounting.
Direct taxes are compulsory transfers imposed directly on the income, profits, or property of individuals and corporate entities.
To distinguish direct taxes from indirect taxes and non-tax revenue sources.
2
Classify the given options based on government revenue categories.
Personal income tax is assessed directly on individual income. Customs duties are indirect taxes, while mining royalties and court fees are non-tax revenues.
To identify the specific item representing direct tax revenue.

Key Concept

Direct Tax Revenue Classification
Estimated Time:45s
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Topics

Sources of Government Revenue

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