PT – March 2023 – L2 – Q1b – Overview of the Ghanaian Tax System and Fiscal Policy

Differentiate between the features of direct and indirect taxes.

Question

Distinguish between the features of direct taxes and indirect taxes.

Answer

Feature	Direct Tax	Indirect Tax
Meaning	Paid directly to the government	Paid to the government via intermediary
Levied on	Profits and income	Goods and services
Taxpayer	Individuals and businesses	End-consumers of products, goods, services
Tax Rate	Directly depends on income and profits	Same for everyone
Tax Burden	Progressive	Regressive
Transfer of Liability	Not transferable	Transferable
Tax Collection	Complex	Convenient
Evasion	Possible	Not possible