Welcome to today’s class!!
We are thrilled to have you in our class!!
In today’s Store Management class, we will be learning about Introduction To Taxation
Introduction To Taxation
Funding public expenditure (like building roads or hospitals) is one of the reasons why governments collect taxes. The government uses the collected revenue to achieve certain economic goals including manipulating aggregate demand levels. A government also uses taxation for the redistribution of income in an attempt to lower income inequality and create a more equitable society.
Taxation is a system where individuals and businesses pay money to the government to fund its operations and services. The financial fuel keeps public infrastructure running, from schools and hospitals to roads and defense systems.
Taxes can be classified or categorized based on various factors such as the method of collection, the impact on income distribution, or the type of goods or income they apply to.
Direct and Indirect Taxes
Direct taxes are levied on individuals or organizations and must be paid directly to the government. They include income tax, wealth tax, corporate tax, etc. Indirect taxes are levied on goods and services and are collected by an intermediary from the person who bears the ultimate economic burden of the tax. Examples include sales tax, VAT, and excise tax.
Progressive, Regressive, and Proportional Taxes
A progressive tax increases as the taxable amount increases, meaning those with higher incomes pay a higher percentage of their income in tax. In contrast, a regressive tax takes a larger percentage of income from low-income earners than from high-income earners. A proportional tax, also known as a flat tax, levies the same percentage rate of taxation on everyone, regardless of income.
Consumption and Income Taxes
Consumption taxes are levied on the consumption of goods and services and include sales taxes and VAT. Income taxes are levied on the income of individuals and businesses.
In summary, Taxation is the compulsory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund various public expenditures.
What is Taxation?
Explain any two types of tax you know.
List five uses of Tax
We hope you enjoyed today’s class. In our next class, we will be talking about Benefits And Problems of Taxation.
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