The government in any country imposes taxes on individuals and businesses in order to fund projects and cover operating costs. Taxes will be charged at levels such as state, local and even to the extent of federal on income, sales, assets and other commercial activities. Some taxes are necessary in order to run certain projects and fund operations. However, when taxes are charged unnecessarily it will have a negative impact.There are two types of taxes – direct and indirect. Direct levies are paid to the government by the tax payer or an organization directly. Indirect taxes are imposed on services and goods. This levy is first borne by the supplier or seller and then by the customer. In order to keep your tax files in order, it is best to hire an accountants Melbourne CBD for an organization. There’s no issue with tolls for individuals when compared to organizations and businesses.
Types of direct taxes
- Company or corporate taxes are imposed on the profits of an organization.
- Capital toll is charged on property or assets such as land, cars, machinery. If a tax is to be charged from a dead person it is called “death duty” and should be paid by the person who inherited the properties.
- A poll due is compulsory on some individuals in certain regions in order to raise money for the government parties.
- Expenditure levy is what is charged from an individual on their income spent
- A capital gain toll occurs when a person sells land or an asset
- The final direct tax is what is charged annually called a personal income levy.
Types of indirect taxes
- VAT (Value-Added-Tax) is one of the well-known charges. It is charged on goods and services.
- Sales levies will only be compulsory on certain types of merchandises and will be collected at the retail or bulk buying stage. The supplies are sold at a higher price to cover the due.
- Cars, machinery, electronics such as televisions will be levied and is collected at the wholesale phase. Organization’s tax accountant has to keep a track of these taxes very closely.
- There are costs when exporting items to another country and is paid by the person exporting them. The importing party will be paying for any items that are brought into the country.
Bear in mind that taxes are beneficial to the public as well. It will be used to ensure that roads are in order and also social servants such as firemen and policemen are being paid through this infrastructure. So keep paying the taxes and help your nation grow!