In the case of each of the following taxes: - a tax on company profits - a tax on employees’ wages - a tax on goods or services. (i) Name each tax above. (ii) State whether each tax is an example of a direct tax or an indirect tax. (iii) Explain each of the underlined terms in part (ii) above.

Leaving Cert Economics Fiscal Policy & the Budget Framework: In the case of each of the follo

In the case of each of the following taxes: - a tax on company profits - a tax on employees’ wages - a tax on goods or services - Leaving Cert Economics - Question b - 2018

Question b

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In the case of each of the following taxes: - a tax on company profits - a tax on employees’ wages - a tax on goods or services. (i) Name each tax above. (ii) State... show full transcript

Worked Solution & Example Answer:In the case of each of the following taxes: - a tax on company profits - a tax on employees’ wages - a tax on goods or services - Leaving Cert Economics - Question b - 2018

Step 1

Name each tax above.

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Answer

A tax on company profits: Corporation Profits Tax
A tax on employees’ wages: Income Tax / PAYE
A tax on goods or services: Value Added Tax (VAT)

Step 2

State whether each tax is an example of a direct tax or an indirect tax.

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Answer

Corporation Profits Tax: Direct Tax
Income Tax / PAYE: Direct Tax
Value Added Tax (VAT): Indirect Tax

Step 3

Explain each of the underlined terms in part (ii) above.

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Answer

Direct taxes are taxes that are imposed directly on income or profits, meaning they are paid directly to the government by the individual or organization receiving the income. Examples include Corporation Profits Tax and Income Tax.

Indirect taxes are taxes that are applied to goods and services, typically included in the price consumers pay. These taxes are collected by an intermediary from the consumer, before being paid to the government. An example is Value Added Tax (VAT), which is charged at each stage of the supply chain.

In the case of each of the following taxes: - a tax on company profits - a tax on employees’ wages - a tax on goods or services - Leaving Cert Economics - Question b - 2018

Worked Solution & Example Answer:In the case of each of the following taxes: - a tax on company profits - a tax on employees’ wages - a tax on goods or services - Leaving Cert Economics - Question b - 2018

Name each tax above.

State whether each tax is an example of a direct tax or an indirect tax.

Explain each of the underlined terms in part (ii) above.

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