Indirect and Direct Tax 5 / 10

Direct tax is charged directly on the person or company

DIRECT TAX

  • Charged directly on the person - a tax on income

  • It is paid directly to the tax authorities

  • Eg. Income tax, Corporation tax, Capital gains tax

Indirect tax is charged on the goods, and is paid (indirectly) by the final consumer

INDIRECT TAX

  • Indirectly charged on the final consumer

  • A tax on spending

  • More you spend - more tax is paid

  • eg VAT

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