Which of the following referred to as 'paper taxes'?

I. Wealth tax

II. Gift tax

The correct answer is Both I and II.Key Points

• Both wealth tax and gift tax are referred to as paper taxes because they are not widely enforced and are often evaded by taxpayers.
• Wealth tax is considered a paper tax because it is difficult to assess the true value of an individual's assets and is often avoided through offshore accounts or other means of hiding wealth.
• Gift tax is considered a paper tax because it is relatively easy to avoid by transferring assets in a way that does not trigger the tax.

Additional Information

• Wealth tax is a tax on the net wealth of an individual or organization, including assets such as cash, bank deposits, real estate, and investments.
• Gift tax is a tax on the transfer of property by one individual to another, without receiving anything in return.