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So what is Tax?
Tax can be defined as a revenue earned by the government of a country on goods and services for the only welfare of the citizens.
Tax is a common way for a country to generate income.
Tax is compulsory payment made by a country's people and the companies operating in a country without any direct benefit.
Tax revenue
The revenue incurred by the total receipts from all taxes and the other duties which has been imposed by government.
It is a compulsory payment as no one can refuse to pay it.
Tax received by the government are spend for the benefit of the people in a country. And one cannot expect tax should be spent on his direct benefit.
Direct taxes
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Direct taxes refers to the tax which are made on the property or income of ghr people and the companies and their ownership cannot be shifted to one another.
The burden of paying the tax lie on the individuals and cannot be shifted to some other individuals.
They effect directly the income level and buying power of people to helo the Change in demand in an economy.
Indirect taxes
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The indirect tax can be shifted from one person to another.
As their money burden to are taken by the final consumers of services and goods. These taxes are imposed in the goods and services. The ownership of paying these taxes can be shifted from one person to another.
These taxes can be avoided by not entering into transactions having these taxes as one can purchase something which doesn't have tax implied.
Items categorised as Direct and Indirect Tax
- Corporation Tax It is the Direct tax it implies on the same individual.
- Goods and services Tax It is indirect tax as it can be shifted to other person.
- Income tax It is direct tax which implies on income of individual.
- Capital gains Tax It is the direct tax and implies on same person and people.
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