Which of the following statements are correct 1. Ability to pay the principal of taxation holds that the amount of taxes people pay should relate to their income or wealth 2. The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes 3. A progressive tax takes a larger share of tax from poor families than it does from rich families 4. Indirect taxes have the advantage of being cheaper and easier to collect Select the correct answer using the code given below:?

Option 2 : 2 and 4 only

• Tax is a mandatory financial implication on the taxpayer by the Government to collectively meet the public expenditure.
• Individuals who earn more are required to pay more tax to the government than individuals who earn less. This is the ability to pay taxation.
• Benefits received Principle states that the tax to be paid should be directly proportional to the number of benefits being received from the use of public services and goods that are provided by the government.
• Progressive Tax: Lower tax rate is imposed on fewer income earners and the higher tax rate is imposed on more income earners. Hence, the average tax rate increases as the taxable amount increases.
• Direct Tax is a tax that is directly paid to the government by the taxpayer. Indirect tax is usually imposed on a manufacturer or supplier who then passes on the tax to the consumer.