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Describe the classifications of taxes

      

Describe the classifications of taxes

  

Answers


Simon
Taxes can be classified as follows.
i. Classifications according to the impact of tax. This means on whom the tax is imposed to and who has to bear the burden of the tax. They are of two types.
• Direct taxes. This is the tax which its impact and incidence are on the same person.
• Indirect tax. This is a tax whose impacts is on one person but paid partly or wholly by another person.
ii. Classification according to the base of tax. The tax base is the object upon which the tax is levied on to which the tax rate is applied. They are of five types.
• Income tax. The tax base is income.
• Import tax. The tax base is the value of goods imported.
• Property tax. The tax base is property.
• Sales tax. The tax base is s sale price of goods sold.
• Export tax. The tax base is the value of goods exported.
iii. Classification according to the rates of tax. The rate of tax is the percentage of the tax base to be taken in case of a tax. They are of four types.
• Progressive tax. A tax is progressive when the marginal rate of tax rises with income.
• Proportional tax. A tax is proportional if the same rat of tax is applied to all taxpayers.
• Regressive tax. A tax is regressive if the rate of tax falls as income rises.
• Digressive tax. A tax is digressive when the higher incomes do not make a contribution or when the burden imposed on them is relatively less.
iv. Classification according to the effects of tax. They are of two types.
• Taxes with no escape
• Taxes with escape


skilled writter answered the question on May 3, 2018 at 17:29


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