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Answer Posted / fahim
Direct Tax : Government levy on the income, property, or
wealth of people or firms. A direct tax is borne entirely by
the entity that pays it, and cannot be passed on to another
entity; for example, corporation tax, income tax, and
national insurance contribution. Unlike the consumption
taxes (see indirect tax), direct taxes are based on 'ability
to pay' principle but (being very obvious to the tax payer)
they sometimes work as a disincentive to work harder and
earn more because that would mean paying more tax.
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