Question

13 Given the following hypothetical data for a country, answer the questions

that follows (the numbers are in millions of dollar).
Import tax = 1725
Personal income tax = 225
Excise tax = 800
Capital expenditure = 4000
Non-tax revenue = 3000
Business profit tax = 1400
Value Added Tax(VAT) = 2000
Recurrent expenditure = 5500
Taxes on export = 1725
i
Now Calculate:
a
the total amount of indirect tax,
b
the total direct tax revenue,
c
the foreign trade tax,
d
the total government revenue for the year, and
e
the total government expenditure

Answer 1

The total indirect tax is 4525 million dollars, total direct tax revenue is 1625 million dollars, foreign trade tax is 3450 million dollars, total government revenue for the year is 11875 million dollars, and total government expenditure is 9500 million dollars.

Step-by-step explanation:

To answer the student's question regarding the hypothetical data for a country, we must carry out the following calculations:

1. Total amount of indirect tax: This includes the Excise tax, Value Added Tax (VAT), and Taxes on export. By adding these together, we get 800 + 2000 + 1725 = 4525 million dollars.
2. Total direct tax revenue: This includes Personal income tax and Business profit tax. By adding these, we get 225 + 1400 = 1625 million dollars.
3. Foreign trade tax: This includes Import tax and Taxes on export. By adding these, we get 1725 + 1725 = 3450 million dollars.
4. Total government revenue for the year: This includes all taxes and non-tax revenues. Adding these, we get 1725 (Import tax) + 225 (Personal income tax) + 800 (Excise tax) + 1400 (Business profit tax) + 2000 (VAT) + 3000 (Non-tax revenue) + 1725 (Taxes on export) = 11875 million dollars.
5. Total government expenditure: This includes Capital expenditure and Recurrent expenditure. Adding these, we get 4000 + 5500 = 9500 million dollars.