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JAMB Economics 2015 Paper

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Question : 31

Total: 70

Mr. Patrick’s income is N900 while that of Mr. Shodawe is N1,300. if Mr. Patrick and Shodawe pay N90 and N130 as taxes, the tax system is

Direct
Progressive
Regressive
Proportional

Solution:

Concept:

A proportional tax charges the same percentage of income as tax to every taxpayer.

Explanation:

Mr. Patrick pays

N90

tax on an income of

N900

.

His tax rate is

\frac{90}{900} \times 100 = 10\%

.

Mr. Shodawe pays

N130

tax on an income of

N1300

.

His tax rate is

\frac{130}{1300} \times 100 = 10\%

.

Both taxpayers pay the same

10\%

rate regardless of income level.

Therefore, the tax system is proportional.

Answer:

D. Proportional

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