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What is the difference between direct tax and indirect tax?

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Question added by manaf almas , Auditor , DAR AL NUZUM PUBLIC ACCOUNTANTS
Date Posted: 2013/06/24
Mohd Asim
by Mohd Asim , Assurance Consultant , Ernst & Young LLP

Direct tax is levied on the taxpayer's income the liability of which is borne by him directly for ex.Income tax, Wealth tax Indirect tax is hidden in the price of the commodity which is borne indirectly by thetaxpayer for ex.
Service tax, Excise duty, Customs duty

A direct tax is one paid directly to the government by the persons (juristic or natural) on whom it is imposed (often accompanied by a tax return filed by the taxpayer). Examples include some income taxes, some corporate taxes, and transfer taxes such as estate (inheritance) tax and gift tax. An indirect tax (such as sales tax, value added tax (VAT), or goods and services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the customer)

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