What is meant by direct and indirect taxes? Give examples of each.

Direct taxes are those taxes that are directly paid by an individual or an organization to the government. These taxes are levied on the income, wealth, or profits of the person or entity paying the tax, and cannot be passed on to someone else. Examples of direct taxes: 1. Income Tax: This tax is levied on the income earned by individuals and companies. The amount of tax paid depends on the income level of the taxpayer. 2. Corporation Tax: This tax is levied on the profits of a company. The rate of tax depends on the company's net profit. 3. Capital Gains Tax: This tax is levied on the profit made from the sale of an asset, such as property or stocks. The tax is only applicable when the resale value of the asset is higher than the initial purchase price. 4. Wealth Tax: This tax is levied on the wealth of an individual or family, such as property or financial assets.

Indirect taxes are those taxes that are levied on goods and services rather than on the income or profits of the person or entity paying the tax. These taxes are applied at the point of sale, and their cost is passed on to the consumer by the seller. Examples of indirect taxes: 1. Value Added Tax (VAT) or Goods and Services Tax (GST): These taxes are levied on the consumption of goods and services. The final consumer bears the burden of the tax, as the tax is included in the price of the goods and services sold. 2. Excise Tax: This tax is levied on specific goods, such as alcohol, tobacco, and fuel. The tax is paid by the producers or manufacturers of these goods but is passed on to the consumer through the price. 3. Customs Duty: This tax is levied on goods that are imported or exported. The tax is paid by the importer or exporter, but the cost is generally passed on to the end consumer. 4. Sales Tax: This tax is levied on the sale of goods and services, and is collected by the seller at the point of sale and is then remitted to the government. The consumer bears the burden of the tax, as it is included in the price of the goods or services.