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 Form 4 Business Studies online lessons on public finance

Classification of taxes

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Answer Text:
Classification of taxes:
Tax system can be classified into three:
1. Based on impact on taxpayer.
-direct taxes e.g PAYE,corporation tax
-indirect taxes e.g VAT, sales tax, custom duty
2. Based on tax base
-income-income tax
-selling price –sales tax
-export/imports-export and import tax
3. Based on tax structure
-Progressive tax- rate increases with tax base
-Regressive tax- rate falls as the tax base increases
-Proportional- rate remains constant


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