As citizens, it is our responsibility to make sure that our country is doing well socially and economically. Taxes must be levied on every citizen so everyone pays tax so it will not affect our country’s growth anymore. The government must consider some laws in collecting taxes so that the amount may be collected properly and spent on the desired objectives. I.e On Infrastructure, health institutions, educational institutions, and many more.

Kinds Of Taxes

In broader terms, there are the following kinds of taxes which are as follows

• Direct Tax
• Indirect Tax
• Proportional Tax
• Progressive Tax
• Regressive Tax

Direct Tax

The kind of tax that is legally imposed on a person and is payable by the same person. This tax is not transferable to another person. The inceptive impact and incidence of tax are on the same person. E.g income tax and property tax are direct taxes

Indirect Tax

It is a kind of tax that is imposed on one person but may be shifted to another person. The final burden of the tax will be on the other person. Producers pay such type of duty. The burden of tax bears by the consumers because the duties are included in the prices of products. Examples of Indirect duties are Sales tax, Custom Duty, etc. 

Proportional Tax

In this kind of duty, if the rate of tax is the same, whether the income of the common man is increasing or decreasing, the duty is called proportional. E.g Sales Duty

Progressive Tax

If the rate of duty increases with the increase in income while decreasing with the decrease in income, then it is meant to be a progressive tax. An example of a progressive tax is the income tax.

Regressive Tax

It is the opposite of progressive tax.  In this kind of duty, the rate of duty decreases with the increase in income, and the rate of duty increases with the decrease in income. It places more burden on low-income earners. For example,  Social security payroll, and duty on consumer goods. etc