What are direct and indirect taxes? Explain with examples.
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Direct taxes are the taxes that are paid to the government by the taxpayer (citizens). It is a tax that is applied to individuals and establishments straight by the government.
Examples: Income tax, corporation tax, wealth tax, etc.
Indirect taxes are applied to the production or sale of goods and services. These are originally paid to the government by an agent, who then adds the amount of the tax-funded to the value of the goods/services and passes on the total amount to the end-user.
Examples: Sales tax, service tax, excise duty, etc.