Direct taxes
Taxes which are collected directly from income and wealth are known as direct taxes.
Types of Direct taxes
Income tax
Income tax is collected on all incomes received by private individuals after certain allowances are made. In most of the economies Income tax is a major source of Government revenue.
Corporation tax
This tax is levied on profits earned by companies. It is a proportional tax which is levied at the constant rate.
Petroleum revenue tax
It is a tax levied on the profits of companies involved in drilling of oil and gas. This tax may or may not exist in other countries.
Capital gains tax
Capital gains tax is charged on the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations.
Property Tax
Many countries have Property tax, or millage tax. It is the tax which the owner pays on the value of the property being taxed.
The taxing authority requires and/or performs an appraisal of the monetary value of the property, and tax is assessed in proportion to that value. Forms of property tax used vary between countries and jurisdictions.
Stamp duty
Stamp duty is a form of tax that is levied on documents relating to immovable property, stocks and shares. Apart from transfers of shares and securities, stamp duties are also charged on the issue of bearer instruments and certain transactions involving partnerships.