Taxes??!! 😠

What does this word  "Tax" actually mean?? 

First of all, there are two types of taxes - 

1. Direct Tax - a tax, such as income tax, which is levied on the income or profits of the person who pays it, rather than on goods or services.
2. Indirect Tax - a tax on expenditure. It is added to the selling price of a good or service.

Here, we will focus on Indirect Taxes.
Again, we have to differentiate between two types of indirect taxes 😆.

1. Specific Tax (flat rate tax) - an indirect tax where a specific amount eg. 1$ or 1€ is added to the selling price of each unit.
2. Percentage Tax (ad valorem tax) - an indirect tax where a percentage eg. 20% is added to the selling price of each unit.

Since you now know what indirect taxes are, let's see them work in real life!!!!

Germany VS USA VS UK

VAT Tax - Germany (19%), USA (0%)😈, UK (20%)

Sales Tax (eg. Food Tax) - Germany (7%), USA (13.725%), UK (0%)