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Questions and Answers
Which one of the following is an example of a direct tax?
Which one of the following is an example of a direct tax?
- Property tax
- Sales tax
- Excise tax
- Income tax (correct)
Which one of the following is an example of an indirect tax?
Which one of the following is an example of an indirect tax?
- Sales tax (correct)
- Income tax
- Property tax
- Excise tax
Who bears the burden of a direct tax?
Who bears the burden of a direct tax?
- The seller
- The purchaser
- The person who pays the tax (correct)
- The government
Who bears the burden of an indirect tax?
Who bears the burden of an indirect tax?
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Which one of the following is an example of an indirect tax?
Which one of the following is an example of an indirect tax?
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Study Notes
Direct and Indirect Taxes
- Income tax is an example of a direct tax, where the individual or organization paying the tax bears the burden.
- Sales tax, value-added tax (VAT), and excise duties are examples of indirect taxes, where the burden is shifted to the consumer.
- The burden of a direct tax is borne by the individual or organization paying the tax.
- The burden of an indirect tax is shifted to the consumer, who pays a higher price for the goods or services.
Examples of Taxes
- Income tax is a direct tax.
- Sales tax, VAT, and excise duties are indirect taxes.
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