Government

Taxation

• Taxes are compulsory payments levied by the government on income, property, sales, etc.
• Main types of taxes: direct (income tax, corporation tax) and indirect (VAT, excise duty)
• Governments use taxation to raise revenue, redistribute wealth, and influence economic activity
• Taxes can impact consumer spending, business investment, and economic growth
• Exam tips: understand different tax types, how they work, and their economic effects