direct taxesa direct tax is one where the impact

Question

DIRECT TAXES

A direct tax is one where the impact and incidence of the Tax is on the same person e.g. Income Tax, death or estate duty, corporation taxes and capital gains taxes.  It can also be defined as the tax paid by the person on whom it is legally imposed.

• Impact of tax

This means on whom the tax is imposed.

• Incidence of tax

This means who has to bear the burden of the tax, i.e. who finally pays the tax.