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Which one of the following is NOT an example of indirect tax?
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- Sales tax
- Excise duty
- Customs duty
- Expenditure tax
- Sales tax
Correct Option: D
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.