Distinguishing direct vs. indirect taxes

Steps:

• Identify direct taxes: corporation profits tax (£20m), inheritance tax (£30m), and income tax (£50m), as they are levied on income, profits, or wealth.
• Identify indirect taxes: duty on imports (£40m) and sales tax (VAT) (£200m), as they are levied on goods and services.
• Sum indirect taxes: £40m + £200m = £240m.
• Match total to options.

Why C is correct:

• Indirect revenue totals £240m, per the definition of indirect taxes as those passed on to consumers via goods/services prices.

Why the others are wrong:

• A (£140m): Excludes VAT, undercounting indirect taxes.
• B (£200m): Includes only VAT, omitting import duties.
• D (£270m): Adds inheritance tax (£30m), which is direct, not indirect.

Final answer: C