Taxes - Definition

Taxes are compulsory financial charges or levies imposed by a government on individuals, businesses, or goods and services. The primary purpose of taxes is to generate revenue for public services like education, defense, healthcare, infrastructure, and more

Types Of Taxes

• Direct Tax

• Indirect Tax

Direct Tax

• These are taxes that are paid directly by individuals or organizations to the government

• Income Tax: Paid by individuals on their income.

• Corporate Tax: Paid by companies on their profits.

• Property Tax: Paid on ownership of land or buildings.

• Wealth Tax: Tax on the value of owned assets (in some countries).

Indirect Tax

• These are taxes that are levied on goods and services

• GST (Goods and Services Tax): A value-added tax on the sale of goods and services.

• Sales Tax: Tax on the sale of goods (replaced by GST in many countries).

• Excise Duty: Tax on production of certain goods like alcohol, fuel, tobacco.

• Customs Duty: Tax on imported or exported goods.