Distinguishing between Direct and Indirect Taxes: Provide an Example of Each

Distinguishing between Direct and Indirect Taxes: Provide an Example of Each Differentiating Direct Taxes from Other Taxes: Give an Instance of Each Let’s get our tax knowledge up to speed. A tax may be levied directly or indirectly. The term “direct tax” refers to a tax that is paid directly from the taxpayer to the government. The burden of these levies cannot be passed on to anyone else. To put it simply, indirect taxes are those that can be transferred to a third party. Manufacturers and suppliers typically bear the brunt of these levies, with the costs ultimately passed on to the end user.

Watch a quick explanation on direct vs indirect taxes

Did you know: The most common example of an indirect tax is the excise tax on cigarettes and alcohol. Value-Added Taxes (VAT) are also an example of an indirect tax.

Examples of Direct Tax

• Income Tax
• Corporation Tax,
• Property Tax, Inheritance Tax, and
• Gift Tax

Examples of Indirect Taxes

• Sales tax
• Excise tax
• Customs tax
• Gas tax

List of payable taxes in South Africa

• Air Passenger Tax
• Capital Gains Tax
• Corporate Income Tax
• Diamond Export Levy
• Dividends Tax
• Donations Tax
• Estate Duty
• Excise Duties and Levies
• International Oil Pollution Compensation Fund Levy
• Mineral and Petroleum Resource Royalty
• Pay As You Earn
• Personal Income Tax
• Provisional Tax
• Securities Transfer Tax
• Skills Development Levy
• Transfer Duty
• Turnover Tax
• Unemployment Insurance Fund
• Value Added Tax
• Withholding Tax on Interest
• Withholding Tax on Royalties

Sources

https://apps.irs.gov/app/understandingTaxes/teacher/whys_thm04_les04.jsp

https://corporatefinanceinstitute.com/resources/knowledge/other/indirect-taxes/

https://economictimes.indiatimes.com/definition/direct-tax