If Mr A earns N2,000 a year while Mr B earns N8,000 but Mr a pays N200 in tax per annum while Mr B pays N400, such a tax is

Fortunate017

11 years ago

yes bcos mr A pays 10% n Mr b whose income is higher pays 5%..it is regressive

Eliphus1

1 year ago

Mr.A
tax rate= 200
tax base= #2000.
200/2000 × 100
= 10%

Mr.B
tax rate= 400
tax base= #8000
400/8000 × 100
= 5%
Therefore it's a regressive tax.
regressive tax is a tax in which there's an increase in income and decrease in tax rate

guyluv2

10 years ago

Regressive favours d high income earner while progressive favours d low income earner....

Fudakson

11 years ago

Yes Fortunate that's the correct Answer