Indirect Tax

Indirect Tax
Indirect taxation implies distributed tax on goods and services, a single individual or organization pays the tax, and then transfers the payment on the price of their goods and services. This method of payment is useful in controlling the production of certain goods, which could have harmful effect on individuals when consumed excessively, the government therefore uses taxation to mitigate it's production.

Alcoholic drinks bear huge indirect cost, owing to heavy taxation levied by government on it's production, the high cost places significant limitations on it's patronage. Cigarette production is also controlled with high indirect taxation, government place restrictions in form of tax on companies which produce cigarette, this results in price inflation of the product, so smoker's have to bear the tax burden. Importation of certain goods can be controlled through indirect taxation, when huge tax is placed on importation, the final market price is bound to be high, so government place heavy taxation on such good's to limit it's importation.

Local production are also encouraged by placing high tax on importation, because profit becomes higher when you produce such goods internally, as importation might incur losses. The practice of indirect taxation is popular, and their role in economical development is obvious.

• Supports local production by placing huge tax on importation. • Limits production and patronage of harmful goods. • Taxation is based on consumption, so you pay tax only when you patronize such products. • The method of payment is flexible. • Government can support production of goods and services by reducing indirect taxation.

• The amount of taxation is not clear. • Companies can easily inflate taxation.



Indirect tax

Indirect tax is better because no one will be able to evade tax. You also won't have to worry about what amount to set aside for paying tax because it is already deducted from whatever you spend on.

With indirect tax, those who spend more will pay it more. For example VAT. If you shop more, you will pay high VAT. This means that indirect tax is fair since you will only pay according to the means of your budget.

Posted by mildredtabitha on 11-03-2017


Direct Tax

Direct Tax
Direct taxation is prevalent in contemporary society, the ruling body generates revenue through this means. When tax is paid directly by an organization or individual, directly to the body responsible for tax collection, we refer to such payments as direct tax. This method of taxation is beneficial for the development of a society owing to the revenue it generates, because the government or ruling body can impose different amount of taxation on individuals and organizations, people who earn more are likely to pay higher tax than low income earners. Some countries assign static figures to income earners as tax, while the rest execute their taxation based on a percentage of income made.

People paid by government are the most faithful direct tax payer's, since the government remove tax from their salaries even before payment is made, this saves them calculation and debt anxiety, so they can always boast of paying their tax timely. Tax is important in a country, for redistribution of wealth and societal development, the government channels tax income to depleting areas in the economy, they could be inform of grants, scholarships or provision or certain amenities.

Direct taxation can be disadvantageous in some cases, as it discourages some individuals from working extra hard, nevertheless the benefits associated with direct taxation makes it worthwhile.

• The amount you are to pay is stated clearly. • People are taxed based on income. • This serves as a major source of revenue. • Government can easily favour a particular profession by reducing their tax. • They support redistribution of wealth.

• Some government staffs are treated preferentially. • Heavy taxation might discourage hardworking individuals.



Direct Tax

Having things transparent is better. And you get to plan this way. Also you can learn more about taxes and execution in due process. Not sure how the people are going to react. But the percent of taxes being thrown. I guess we deserve to get better output from the govt. And on that option, It's reasonable to see how the direct tax has it's implications too.
Posted by overcast on 10-25-2017
Agreed. Since paying taxes is unavoidable and there is no way around it we might as well get to know every detail about it to make it crystal clear


Direct tax is just a lot better because it's a lot better when you know exactly what you have to pay as tax. If you are going to pay tax then you might as well know exactly what you have to pay. Obviously, it would be nice if governments decided not to tax us too much but I guess it is necessary.
Posted by kingcool52 on 10-25-2017

Cannot be passed to another person

Unlike indirect tax, Direct tax is a tax that cannot be passed to another person. The person actually making money is the one who bears the burden. It's the tax that should be used exclusively by the government. Indirect tax is unfair. It allows businessmen to increase the prices of their goods and services because the tax is already included in the price. The ones affected are the consumers and not the business. It's a scam that needs to be stopped.
Posted by limberg on 10-25-2017

Direct Tax

I honestly prefer to pay a single direct tax because indirect taxes can be much more expensive. Proof of this is that companies can include whatever value they want in taxes on products and this really is bad. On the other hand, if I pay a direct tax, I will know exactly what I am paying.
Posted by hermessantos on 10-29-2017

Direct way.

I always prefer the direct way because transparency in the facts is always something that I'll value very much. I know what's going on, I'm seeing the numbers, I know how they're "moving" and this makes me more "satisfied" with any kind of charge / tax.
Posted by wiseagent on 10-26-2017


One good thing about direct tax is that the consumers are going to have a feeling of what the tax is all about which is awesome since it will shape the way that they spend in the market. I am not saying that indirect taxation system is not cool, but when we put some things into considerations, you get to see that direct taxation is pretty okay as well.
Posted by Barida on 10-08-2018

Direct Tax

I would choose Direct Tax because this is mandatory and you would see the tax that you are paying for thru tax certificate unlike the indirect tax wherein no documents and even not name to you the tax that they are collecting in you.
Posted by mark86 on 10-26-2018

Direct taxes

Well any kind of tax is always not a very pleasent thing to bear when it comes to common citizens of a country. However i think that Direct taxes will always be prefered by the working class instead of the Indirect tax. Indirect taxes can be a way of cutting down on your income without your realisation. On the other hand in the case of direct taxes ,there is some amount of transperancy and accountability associated with it.
Posted by jpk0007 on 12-06-2018

The only way to fairly tax

I support a direct tax because it enables adjustment about who pays how much. I don't think anyone would question the fact that there is a certain minimum amount of money needed to survive. This minimum amount is what an individual requires to buy things such as food and shelter. A direct tax allows the government to account for this minimum amount and set a scaled tax system accordingly. Contrasted with indirect taxes on the consumption of goods, a direct tax can be proportionate to individuals based upon their means. An indirect tax on goods disproportionately affects the poorest of society.
Posted by LMFI2031 on 10-08-2018


Having the ability to have direct tax can give you the advantage of you and your partner or family on planning on how to take care of this process. It has many options and ways for people to take a hold of and how to properly take care of the situation.
Posted by YoloBoy on 12-10-2018


I don't like either direct or indirect taxes. None of us actually like to pay taxes but unfortunately we have to. The government does get a lot of revenue from taxation but still there are no developments in my country. Inflation and unemployment are increasing. Investment are decreasing. The government is for sure misusing those funds.
Posted by Pixie on 10-25-2017
I have seen various tax models out there. And learned that direct seems to be something people can get in terms with. The more lack of transparency comes in when there are indirect taxes. and it can be good enough to see that it can add some value. there are some people who have seen the benefits of the taxes. And then there are some people who think that indirect taxes can be good it varies based on the state.
Posted by overcast on 10-25-2017
If taxes can be scrapped, I think that it would be possibly good but we all know that it's not going to be possible. The state needs a means to generate fund in order to successfully run the affairs of the state. So therefore, it makes taxes a justifiable thing for the government to do. Now, having said that, and between indirect and direct tax, I would be going with the latter being direct tax because it's more fair system.
Posted by Heatman on 10-25-2017
I guess of the two I would support a direct tax, but no one likes paying taxes and I wish we didn't have to pay them. I think that it is important to know what the taxes are going toward, and what they will be used for. It is important to know that your money is going to important causes.
Posted by kgord on 10-25-2017
indirect tax is appropriate because of its enormous benefits which is for the benefits of the masses at least it only those that patronize those goods will bear the brunt. Indirect tax helps local products to grow and in turn boost the economy, it good for both the citizens and government.
Posted by lovely on 10-25-2017
Jonathan Solomon
Well, no one enjoys the principle of paying taxes, in general. Though if I had to choose between the two, I go with direct tax over indirect tax. I think "transparency" is the key word here. To be clear, indirect tax does provide local economy and business growth. But does nothing for the individual paying those taxes, in the long run. So both are a sort of give/take situation. Just which works best for you.
Posted by Jonathan Solomon on 10-25-2017
Both tax measures have a unique purpose as one will target the deterrence of undesirable products or indirectly promote local products by levying taxes on imports. Other applications permit the provisioning of revenue required to implement government projects and allow the government to fund aspects required to boost national development. A unique balance of both tax methods is applicable so as to ascertain optimal results with limited strain on the country's scarce resources and citizenry.
Posted by Joteque on 10-25-2017
I would have to choose the indirect taxation system in the sense that I've come to see that some of the people in this world consumes so much and that's very bad of them. So, making it possible for them to indirectly pay taxes for what they consume is definitely the way things will go in order to make them cut down on their expenses.
Posted by Barida on 10-25-2017
Definitely thats the way to go people that consume contraband and imported goods should pay more which will help deter them and others to dump the habit and patronize home or locally produced goods.A certain economy can't grow unless the citizens are willing to do business with the locals.
Posted by lovely on 08-02-2018
They both have their pros and cons and as everybody has previously stated, it would be better if you didn't paid either but taxes are a part of life. We will always have to pay them directly or indirectly whether we approved of it or not. Taxes are never going to go away. I prefer a direct tax because it is upfront with how much you pay so you can better prepare yourself and your life.
Posted by Sue on 10-25-2017
gata montes
Bearing in mind that if you work you have no option but to pay both - whether you like it or not - direct tax on your salary and indirect tax on virtually everything you buy - both of which go to the government to misspend as they see fit - rather than chose one or the other of these two options - my preference - although ideally I’d prefer not to pay any tax at all - would be to only pay one tax rather than two - or to put it more simply - only be taxed once instead of twice - meaning - they either do away with the indirect tax on goods and only take direct tax from our salaries or vice versa.
Posted by gata montes on 10-26-2017
Direct tax is more prefarable than indirect tax because the amount of money that you are expected to pay is stated clearly by the government, but in indirect tax the company can even inflate the tax without the knowledge of their customers thereby making them to pay more than the amount they are expected to pay.
Posted by babyright on 10-26-2017
I am a business owner and I pay direct tax as well as indirect tax. I pay indirect tax on the sales (usually, value added tax) and the direct tax on the income generated by the business (income tax). As a business owner, I don't have an option to choose between these two. I have to pay both. Even though I pay sales tax (indirect tax), the end taxpayer is the buyer (because he pays tax on the goods he purchased), thus, it is not a burden for me. However, paying the direct tax can be a burden.
Posted by vinaya on 10-31-2017
We are used to the mix of direct and indirect taxes. The Bureau of Internal Revenue collects taxes from the income earners aside from the business taxes of corporations. But we are also burdened with indirect taxes such as the VAT that is added on to our purchases of goods particularly gasoline. Maybe the government really needs money that’s why they have a lot of taxes like the excise tax on some goods and also the ad valorem for the imported goods.
Posted by Corzhens on 02-05-2018
We're all paying a mix of both types of taxes so I don't really see the point of choosing between these types of taxes. It's beyond our control. Forms or sources of income fall naturally into either tax categories and we can't choose one over the other.

There are just some misconceptions about these classifications. For example, the OP says for indirect taxes: The amount of taxation is not clear. Companies can easily inflate taxation. This is far from the truth. VAT is an indirect tax and it has a fixed percentage so we know how much goes to VAT for each receipt. Why would a company inflate taxation when the tax amount is supposed to be remitted to the government anyway? Overpricing can dissuade consumers from buying.
Posted by chatbox on 03-05-2018
Right now my country is suffering from both indirect and direct taxes. But indirect tax has the most dire effect to the whole population because the prices of most products and services are going up and that means a higher inflation rate and a weaker currency.
Posted by Kakashi2020 on 10-08-2018
This is the same fate my country is suffering now.companies and producers are indirectly transferring their taxes to their consumers and the prices of products have skyrocketed which is making our currency become weaker and hardship is in the increase.
Posted by lovely on 11-02-2018
Taxes are very hard to understand. We must be serious in paying our taxes because money collected from taxes are being used by the country to improve the services and uplift the lives o its people. It is our responsibility to ensure that we pay our taxes correctly and on time.
Posted by bee.rthooyah on 12-10-2018