Role of Taxation in Economy -
April 3rd, 2012
In the colloquial sense, an indirect tax (such as sales tax, a specific 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 consumer). The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by government from the persons (legal or natural) on which it is imposed. Some commentators have argued that "a direct tax is one that cannot be shifted by the taxpayer to someone else, whereas an indirect tax can be."
SOURCES OF PUBLIC FINANCE
•TAX –COMPULSORY payment based onincome/profits.
•FEE-payment made to the government by a personin exchange of a service. License fee, registration fee.
•PRICE- for supply of goods & serviceseg supply of gas, telephone, railways.VOLUNTARY depending on use.
•SPECIAL ASSESSMENT-COMPULSORY payment due to a benefit derived by public works(eg:TPS,BRTS,River front development,Vastrapur lake).