Consider the following statements regarding specific and ad valorem tax:
1. While a specific tax is levied on the value of the imported item, ad valorem is computed on the physical quantity of the goods being imported.
2. Specific taxes are more progressive than ad-valorem taxes.
Which of the statements given above is/are correct?
1
1 only
2
2 only
3
Both 1 and 2
4
Neither 1 nor 2