Describe the differences between direct and indirect taxation
Block Type
Knowledge Checkpoint
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Knowledge checkpoint: Describe the distinctions between direct and indirect taxation
Direct tax is a tax paid directly by a person or business to the government from incomes or profits, such as Income Tax and Corporation Tax.
Indirect tax is a tax applied to a good or service at the point of sale, such as Value Added Tax (VAT). The tax is included in the price that consumers pay for a good or service. The seller of the good or service deducts the VAT from the total price and pays the tax to the government.
Describe the differences between direct and indirect taxation