In this question, candidates were required to define direct and indirect taxes, identify any four benefits of imposing import duties on goods and state two reasons why indirect tax is difficult to evade. A good number of candidates attempted this question, most candidates were able to define direct and indirect taxes but were unable to adequately expatiate on their points in the (b) and (c) parts of the question. Candidates were expected to provide the following answer to score maximum marks in this question.
(a)(i)    A direct tax is a compulsory levy imposed by government on the incomes and properties of individuals and firms. Examples of direct taxes are personal income tax, corporate tax, property tax etc.                                                         
     (ii)   An indirect tax is a compulsory levy by government on goods and services. Examples are import duty, excise duty, value - added tax / sales tax etc.                           
(b) (i)   Import duties help government to raise revenue for development.
     (ii)   It is easy and cheap to collect since it is collected at  entry points.
     (iii)  It can be used to control  the importation and consumption of certain goods and services which are considered harmful to man.
     (iv)  It can be used to prevent or correct balance of payments deficit through the restriction of imports.
     (v)   It can be used as a retaliatory measure against the unfriendly acts of other countries.
    (vi)   It can be used to protect local industries from foreign competition.
    (vii)  Its enforcement can help to create employment since demand for local products will rise.
   (viii)  It can be used as an anti-dumping measure to prevent the influx of cheap imported products
 (c)(i)   Indirect tax is embodied in the price of the commodity and  consumers pay the tax as they purchase the product and so are not aware of the amount of tax they pay.

     (ii)   Imported goods pass through official entry points and importers pay the tax as they clear their goods.
(iii)  In respect of excise duties, tax officers are usually positioned on the premises of businesses to take account of all output.
(iv)  Because the tax net is wide, it covers  many people who buy goods and services.