Is Goods and services tax received by the government included/excluded in National Income?
Is Goods and services tax received by the government included/excluded in National Income?
Anurag Pathak Changed status to publish December 8, 2023
No,
Goods and services tax received by the government will not be included in the national income as it is an indirect tax and a compulsory transfer payment received by the government.
Explanation:
Any tax to the government is a transfer payment as the government does not guarantee any productive services and goods in return.
Thus any economic transaction where no factor services against it, is a transfer payment.
It does not add to the flow of goods in the economy.
Thus, It is not included in the National Income.
Anurag Pathak Changed status to publish December 8, 2023
