A level Taxation Quizzes

A level Taxation Quizzes.
(Taxation quizzes for A level GCE, and GCSE students studying Economics)  

Hello folks and welcome to gcequiz.com, an online revision platform that will help you in the preparation of any of your general exams, be it GCE, GCSE or necta. In this section of A level Taxation, we are going to be looking at taxation in general, how the government levy taxes, why they levy the taxes, classification of taxes alongside their types and advantages as well as disadvantages of some taxes.

Taxes are charges that are imposed on citizens and their businesses by the government. The main purpose of taxation is to raise finance for the government. Also, taxation purposes are

-To correct for market failure
-To redistribute income
-To manage aggregate demand through fiscal policy and lastly,
-To pay for government spending 

Taxation with itself is classified into two, Direct and Indirect taxes

Direct taxes
Direct taxes are paid directly to the government, an example is income taxes. Other examples are land taxes, personal property tax, transfer taxes, entitlement taxes, property taxes, and capital gains tax. These taxes are paid based on an individuals(taxpayer) ability to pay. This means that, the higher their capabilities to pay, the higher the taxes and vice versa. Some very few advantages of direct taxes are:
-It promotes equality amongst taxpayers
-Promotes certainty as well as,
-It saves time and money

Indirect taxes
These are taxes that can be transferred from one entity to another, thereby making it possible for the burden of payment to be put on another's shoulder. These charges can not be escaped from as they are indirect and usually uncalled for. 

These taxes can also lead to inflation which is the decline in purchasing power of a given currency over time.
■ Direct taxes such as income tax, corporation tax on the profits of businesses and national insurance contributions paid by employers and employees. These are so called because they are paid directly to the government by taxpayers, either as individuals or companies, from their incomes. In 2010/2011, they contributed 57% of total tax revenue. 

 ■ Indirect taxes such as value-added tax (VAT) on the retail sales of many goods and services, excise duties on fuel, alcohol and tobacco products. This type of tax also includes council tax and business rates that are charged locally on the ownership of houses, apartments and business premises. Indirect taxes are so-called since they are collected for the government by retailers and local government bodies.

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