Q.(a) Bring out the Merits of Indirect Taxes and Direct Taxes.

(a) Merits of direct taxes: equity, ability-to-pay, certainty, elasticity, economy, civic consciousness. Merits of indirect taxes: convenience, wide coverage, hard to evade, elasticity, high revenue. (b) Statistics is a science and an art of collecting, organising, presenting, analysing and interpreting numerical data; its scope is very wide, covering economics, business, government and research.

(a) Merits of Direct Taxes and Indirect Taxes

Merits of Direct Taxes (e.g. income tax, wealth tax):

1. Equity — based on the ability to pay; the rich pay more (progressive), so it promotes justice.
2. Certainty — the taxpayer knows how much to pay and the government knows how much to collect.
3. Elasticity — revenue can be increased by raising rates as income grows.
4. Economy — collection costs are relatively low.
5. Civic consciousness — taxpayers become aware of their contribution and take interest in public affairs.
6. Reduces inequality — progressive rates redistribute income.

Merits of Indirect Taxes (e.g. GST, customs duty):

1. Convenience — paid in small amounts at the time of purchase, hardly felt by the consumer.
2. Wide coverage — everyone who buys goods contributes, so the tax net is broad.
3. Difficult to evade — since the tax is included in the price of goods.
4. Elasticity / large revenue — a small rate on many goods yields large revenue.
5. Can discourage harmful goods — high duties on tobacco and liquor check consumption.

(b) Nature and Scope of Statistics

Nature: Statistics is regarded both as a science and as an art. It is a science because it uses systematic methods and principles to study numerical facts (collection, analysis, interpretation). It is an art because it applies these methods skilfully to solve real problems. Statistics deals with aggregates of facts, expressed numerically, affected by many causes, collected for a definite purpose, and placed in relation to one another.

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