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