Taxation (Direct &
Indirect) Practice 2026-
VERSION WITH
QUALITY QUESTIONS
AND VERIFIED
ANSWERS 100%
CORRECT WITH
,RATIONELS.
1. Which of the following is a direct tax?
A. VAT
B. Excise Duty
C. Income Tax
D. Sales Tax
Answer: C. Income Tax
Direct taxes are imposed directly on
income or wealth of individuals or
entities.
2. VAT is classified as:
A. Direct tax
B. Indirect tax
,C. Progressive tax
D. Personal tax
Answer: B. Indirect tax
VAT is passed on to the final consumer,
making it an indirect tax.
3. The ability-to-pay principle relates to:
A. Indirect taxation
B. Direct taxation
C. Customs duty
D. Excise duty
Answer: B. Direct taxation
Direct taxes consider taxpayer income
levels, aligning with ability to pay.
, 4. Which tax is charged on imported
goods?
A. Income tax
B. VAT
C. Customs duty
D. Corporate tax
Answer: C. Customs duty
Customs duty applies specifically to
imports and sometimes exports.
5. A progressive tax means:
A. Same rate for all
B. Higher income, lower tax
C. Higher income, higher rate
D. Fixed tax
Answer: C. Higher income, higher rate
Indirect) Practice 2026-
VERSION WITH
QUALITY QUESTIONS
AND VERIFIED
ANSWERS 100%
CORRECT WITH
,RATIONELS.
1. Which of the following is a direct tax?
A. VAT
B. Excise Duty
C. Income Tax
D. Sales Tax
Answer: C. Income Tax
Direct taxes are imposed directly on
income or wealth of individuals or
entities.
2. VAT is classified as:
A. Direct tax
B. Indirect tax
,C. Progressive tax
D. Personal tax
Answer: B. Indirect tax
VAT is passed on to the final consumer,
making it an indirect tax.
3. The ability-to-pay principle relates to:
A. Indirect taxation
B. Direct taxation
C. Customs duty
D. Excise duty
Answer: B. Direct taxation
Direct taxes consider taxpayer income
levels, aligning with ability to pay.
, 4. Which tax is charged on imported
goods?
A. Income tax
B. VAT
C. Customs duty
D. Corporate tax
Answer: C. Customs duty
Customs duty applies specifically to
imports and sometimes exports.
5. A progressive tax means:
A. Same rate for all
B. Higher income, lower tax
C. Higher income, higher rate
D. Fixed tax
Answer: C. Higher income, higher rate
