In: Economics
Answer 1 .Taxation is the process by which the govt. implies taxes on the citizens or business entities of its country . The taxes are the largest source of income of govt. of a country .
There are two categories of taxes :
Direct tax- It is a direct tax and it is applied directly on a individual or a business.
Indirect tax- It is received from the business or individual indirectly , such as VAT ETC.
Types of taxes :
Income tax- Income tax is applied on the income of the citizens of a country or A tax which is applied on the earning people of a country .
Below table shows the tax brackets for 2020/21.
Tax band | Taxable income | Rate |
Personal allowance | up to £12,500 | 0% |
Basic rate | £12,501 to £50,000 | 20% |
Higher rate | £50,001 to £150,000 | 40% |
Additional rate | over £150,000 | 45% |
Excise duty on alchohal products , tobacoo products and other related products.
Tax on corporations or profits of businesses.
Taxes on buying property or selling .
Taxes on purchasing shares of any firm.
Taxes on goods purchased by any citizens .
Answer 2. As i said before taxes provide a large amount of income to the government of any country which benefits the citizens and environment of a country in return . The govt. uses the money collected by taxes to develop the infrastructure of the country by building roads , dams , wildlife centuries , parks , buildings which benefits the citizens of the country . Taxes reduce the gap between rich and poor as mostly taxes are applied on behalf of the income of a person as if the person is earning less he has to pay less or no tax to the govt . but if the person is earning a lot of money he had to pay a lot of tax .
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