- 8 Marks
TAX – Nov 2020 – L1 – SA – Q5a – Taxation of Specialized Businesses
State the benefits of imposing taxes on luxury goods and services.
Question
Luxury tax can simply be defined as tax imposed on goods and services that are considered by the government to be luxury goods and services. Luxury goods and services are those that are not considered to be essential by the government and which are consumed by the rich or wealthy class of the society.
Goods and services that are classified as luxury are usually assessed to tax as a percentage of the sales price but likely at a higher percentage than the regular sales tax or value added tax on essential commodities.
Required:
State FOUR benefits of taxation of luxury goods and services.
(8 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Government Revenue, Luxury Tax, Non-Essential Goods, Taxation Benefits
- Level: Level 1
- Topic: Taxation of Specialized Businesses
- Series: NOV 2020
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