Which tax is not classified as an indirect tax ?
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Answer: B. Sales tax
Explanation
Income tax is assessed directly on the earnings of individuals and corporate entities without intermediary collection agents. Indirect taxes are levied on goods and services rather than on income, meaning the statutory burden differs from the economic incidence. Since income taxes fall squarely under the direct tax classification, it is the correct answer to the question. Taxation systems generally divide government levies into direct taxes on wealth and income, and indirect taxes on consumption transactions. Direct taxes are difficult to shift to other economic agents because they target specific taxpayers based on their financial capacity. Indirect taxes can be passed along to consumers through higher retail prices embedded in the cost of purchased commodities.
Sales tax is collected by merchants at the point of sale and remitted to the government, making it a classic indirect tax. Custom duty is charged on goods brought across international borders, operating as an indirect tax on imported merchandise. Tariffs function identically to customs duties by imposing indirect taxation on international trade items to protect domestic industries.
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