Question

Question 6 of 10 Which situation is an example of direct taxation?

Answer 1

The situation that represents an example of a direct taxation system is when businesses send their proportionate income in terms of taxes to the government.

Option D is the correct answer.

What is a direct tax?

Direct tax is a type of tax paid to the government directly by the varied taxpayers like companies and individuals.

The situations presented in option A deal with the charging of importation tax and option B relates to the imposition of sales taxes where both fall under the indirect taxation system as the payment of both taxes has been done by taxpayers but actually funded by buyers. The charging of bank fees does not come under the purview of taxation.

Therefore, the direct tax arises when the entities make reimbursement of taxes to the government every year.

Learn more about the direct tax in the related link:

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