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There are some disadvantages of the taxes imposed by the government on the gods and services. The most important one being that as taxes are imposed on goods, the price offered to the consumer becomes higher. This means that it decreases the purchasing power of the consumers because they are paying a higher amount to purchase the same quantity. It strains their income and they have also have lesser left to spend. In addition to this, new investors will be unwilling to invest in a country that has high tax levels and this may put off many potential investors. It may also cause a decline in the standard of living. A lot of producers may want to export most of their products.
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