Taxation Flashcards
Define direct taxation.
Direct tax is a tax that the government collects from the taxpayer directly and is a tax levied on a business’s of individual’s wealth or income.
Define indirect taxation.
Indirect taxes are taxes which the government collects from taxpayers through intermediates.
Define tax harmonisation.
Tax harmonisation refers to the aims of the EU to align all tax rates.
Define tax avoidance.
Tax avoidance involved legal methods of avoiding tax.
Define progressive tax.
Progressive taxes take into account the taxpayer’s ability to pay.
Define regressive taxes.
Regressive taxes ignore a taxpayer’s ability to repay.
Define proportional tax.
Proportional tax is one where the percentage of tax paid by the taxpayers stays constant as interest change.
Define imposition of tax.
Imposition of tax refers to the individual, firm or commodity the tax is placed on.
Define incident of tax.
Incidence of tax refers to the individual or firm who actually pays the tax.
Define revenue buoyancy.
Revenue buoyancy is when the actual tax revenue collected is greater than estimated revenue.
Define fiscal drag.
Fiscal drag is when government revenue is greater than planned, but government expenditure does not change.
Define tax wedge.
Tax wedge is the difference between the gross salary an employee costs the employer and the net wage they take home.
Define taxation.
Taxation is the money people have to pay in order to fund Social Services, Public Heath and Education.
