What is the primary purpose of taxation in an economy?
a) To increase inflation
b) To finance government expenditures
c) To encourage tax evasion
d) To reduce the value of currency
Which of the following is a direct tax in Pakistan?
a) Sales tax
b) Income tax
c) Customs duty
d) Excise duty
What is the current tax collection authority in Pakistan?
a) Ministry of Commerce
b) Federal Board of Revenue (FBR)
c) Securities & Exchange Commission of Pakistan (SECP)
d) State Bank of Pakistan
Which tax is levied on imported goods in Pakistan?
a) Excise tax
b) Customs duty
c) Capital gains tax
d) Property tax
What is the main objective of fiscal policy?
a) To increase unemployment
b) To manage government revenue and expenditures
c) To promote currency devaluation
d) To reduce foreign investment
Which type of tax is imposed on goods and services at the point of sale?
a) Capital gains tax
b) Property tax
c) Sales tax
d) Wealth tax
What is the current standard General Sales Tax (GST) rate in Pakistan?
a) 5%
b) 10%
c) 18%
d) 17%
Which tax is charged on the profit earned from selling an asset?
a) Capital gains tax
b) Excise duty
c) Import duty
d) Income tax
What does progressive taxation mean?
a) Higher-income earners pay a larger percentage of their income
b) All income groups pay the same tax rate
c) Lower-income earners pay higher taxes
d) Taxes decrease as income increases
Which organization monitors Pakistan’s fiscal policies?
a) International Monetary Fund (IMF)
b) United Nations (UN)
c) World Health Organization (WHO)
d) International Labour Organization (ILO)
What is the budget deficit?
a) When government revenue exceeds expenditures
b) When government expenditures exceed revenue
c) When there is no difference between revenue and expenditures
d) When GDP decreases
Which of the following is an example of an indirect tax?
a) Income tax
b) Sales tax
c) Corporate tax
d) Wealth tax
What is the term for a tax imposed on a specific good, such as alcohol or tobacco?
a) Income tax
b) Excise duty
c) Property tax
d) Corporate tax
Which of the following is NOT a component of fiscal policy?
a) Taxation
b) Government spending
c) Monetary policy
d) Budget allocation
What is the corporate tax rate in Pakistan for the fiscal year 2024?
a) 10%
b) 15%
c) 29%
d) 35%
What does withholding tax mean?
a) Tax deducted at the source before income is received
b) A tax applied only to imported goods
c) A penalty tax for late payments
d) A tax applied to foreign investments only
Which tax is paid by businesses on their profits?
a) Wealth tax
b) Income tax
c) Corporate tax
d) Sales tax
What is the impact of an increase in tax rates on businesses?
a) Higher investment and growth
b) Lower production costs
c) Increased cost of doing business
d) Reduced tax compliance
Which of the following is a measure to reduce tax evasion in Pakistan?
a) Increasing indirect taxes
b) Strengthening tax administration and enforcement
c) Eliminating corporate tax
d) Reducing sales tax to zero
Which body proposes the annual federal budget in Pakistan?
a) State Bank of Pakistan
b) Ministry of Finance
c) Federal Board of Revenue
d) Supreme Court of Pakistan
What is the term for the reduction or elimination of a tax liability granted by the government?
a) Tax amnesty
b) Tax compliance
c) Tax evasion
d) Tax avoidance
Which tax is paid when purchasing real estate in Pakistan?
a) Property tax
b) Wealth tax
c) Import tax
d) Capital gains tax
What is the impact of tax incentives on the economy?
a) Encourages investment and economic growth
b) Increases inflation
c) Reduces business activity
d) Decreases employment rates
Which of the following is NOT a function of taxation?
a) Revenue generation
b) Income redistribution
c) Encouraging economic inequality
d) Market regulation
