Distinguish between:
2. Direct tax and indirect tax
Direct tax
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Indirect tax
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It is imposed directly on the taxpayer and is paid by the taxpayer directly to the government.
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It is a tax collected by intermediaries (for example, retailers) from the ultimate taxpayers i.e. the consumers.
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The incidence and impact of the tax is on the same person.
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The incidence and impact of the tax is on different persons.
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For example - Income tax, property tax.
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For example - VAT, custom duty.
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