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Government Taxation Strategies Explained

The document outlines suggested solutions for a chapter on the role of government, focusing on tax structures and rates across different countries. It includes various sections detailing direct and indirect taxes, tax rates for individuals, and classifications of tax systems such as proportional, progressive, and regressive. Additionally, it provides examples of tax rates and their implications on different income levels.

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Seo ChangBin
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78 views2 pages

Government Taxation Strategies Explained

The document outlines suggested solutions for a chapter on the role of government, focusing on tax structures and rates across different countries. It includes various sections detailing direct and indirect taxes, tax rates for individuals, and classifications of tax systems such as proportional, progressive, and regressive. Additionally, it provides examples of tax rates and their implications on different income levels.

Uploaded by

Seo ChangBin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

SUGGESTED SOLUTIONS

CHAPTER

13 Role of Government

Section A
  1 A 2 D 3 A 4 B 5 C
  6 D 7 A 8 A 9 D 10 A
11 C 12 A 13 B 14 D 15 C
16 B 17 D 18 C 19 B 20 B

Section B
1 (a) (i) Total direct taxes 5 3.6 1 4.5 1 4.0 5 12.1
(ii) Total indirect taxes 5 2.6 1 3.1 1 2.2 5 7.9
(b) (i) Open market operation
(ii) Legal cash reserve requirement
(iii) Funding

2 (a)
Original tax rate (%) New tax rate (%)
15 15
10  9
11 13
Country A – Proportional tax; Country B – Regressive tax; Country C – Progressive tax

3 (a)
Tax rate (%)
Total taxable income (RM)
Individual A Individual B Individual C
2,000 10 10 20
4,000 10 15 16
6,000 10 20 12
8,000 10 25  8
10,000 10 30  4
(b) Individual A – Proportional; individual B – Progressive; individual C – Regressive
(c) (i) Companies taxes
Suggested Solutions
2

(ii) Individual income taxes


(iii) Stamp duties

4 (a)
Tax rate (%)
Country X Country Y Country Z
10 15 5
10 11 7.5
10  9 15
(b) Country X – Proportional tax rate
Tax rate

Income

Tax rate is constant as income rises

Country Y – Progressive tax rate


Tax rate

Income

Tax rate increases as income increases

Country Z – Regressive tax rate


Tax rate

Income
Tax rate decreases as income increases

5 (a)
Types of tax
Proportion
Progressive
Proportion
Regressive
Progressive

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