TEXT SUMMARY

TOPIC: DIRECT AND INDIRECT TAXES

This summary aims to explain the conceptions about direct and indirect taxes, to understand the
function of each type of tax, importance and their differences.

In this summary, we understand that taxes are compulsory, cash assessable, required by a public
entity, for the pursuit of public purposes, without individual consideration, and whose taxable
event is based on manifestations of contributory capacity, and should be provided by law.

Indirect Tax - is collected by one entity in the supply chain (usually a producer or retailer) and
paid to the government, but it is passed on to the consumer as part of the purchase price of a
good or service. The consumer is ultimately paying the tax by paying more for the product.

Indirect Tax - are defined by contrasting them with direct taxes. Indirect taxes can be defined as
taxation on an individual or entity, which is ultimately paid for by another person. The body that
collects the tax will then remit it to the government. But in the case of direct taxes, the person
immediately paying the tax is the person that the government is seeking to tax.

Import duties, fuel, liquor and cigarette taxes are all considered examples of indirect taxes. By
contrast, income tax is the clearest example of a direct tax, since the person earning the income is
the one immediately paying the tax. Admission fees to a national park is another clear example
of direct taxation. Some indirect taxes are also referred to as consumption taxes, such as a value-
added tax (VAT).

Concerning the differences between direct and indirect taxes, it is worth subletting that, the
Direct Taxes are those that affect the directly taxed tax base (assets or income). This is a tax on
the assets or income of people. EX: IRPS, IRPC, etc; and, the Ind Indirect Taxes - are those that
affect the use of taxable income and not directly on it. This is a tax on the use of assets or on the
use of people's income. EX: VAT, Consumption tax.

in what it refers to the taxang is a term for when a taxing authority, usually a government, levies
or imposes a tax. The term “taxing” applies to all types of involuntary levies, from income to
capital gains to estate taxes. Though the taxing can be a noun or verb, it is usually referred to as
an act; the resulting revenue is usually called “taxes”.

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the taxes consist of direct and indirect and may be paid in money or as its labour equivalent
(often but not always unpaid labour).

Finally, it is important to highlight the legal definiction and economic definiction of taxes diferer
since some economic do not consider all the transfers to goverment as being taxes