What is the primary purpose of indirect taxes?

The primary purpose of indirect taxes is to generate revenue for the government without directly taxing income. This is accomplished through taxes levied on the sale of goods and services, which are typically passed on to consumers through higher prices. By using indirect taxes, governments can collect money for public services, infrastructure, and welfare programs while keeping direct taxes, such as income tax, lower or more manageable for citizens.

Indirect taxes play a vital role in the tax system by diversifying the sources of revenue for the government, allowing it to fund various initiatives. They are often more difficult to evade compared to direct taxes because they are included in the price of goods and services that consumers buy regularly.

In contrast, other options focus on different aspects that either do not align with the primary purpose or limit the broader scope of indirect taxes. While supporting public services and managing economic conditions are important roles of government, they are not the immediate primary objective of indirect taxes. Instead, these taxes are more about financial generation rather than the regulation or support of specific industries.