Disadvantages/demerits of specific tax
- Leads to inflation
- promotes income inequality
- leads to misallocation of resource
- discourages investment
- promotes trade malpractice such as smuggling and tax invasion
- breeds insufficiency of protected firms/industries
- leads to resentment of government
- increases production costs hence low productivity
- discourage saving
- reduce consumption
CATEGORIES Economics
TAGS Dr. Bbosa Science
