- TAX EVASION -An illegal acts whereby people companies try to dodge payment of taxes.
- TAX AVOIDANCE – An illegal act of attempting to escape or exploit the loopholes in tax law.
- PROPORTIONAL TAX – A situation where people pay the same percentage of their income.
- PROGRESSIVE TAX – This is a case where the amount of tax paid increases.
- REGRESSIVE TAX – This is a case where the tax rate decreases as income increases.
THE INCIDENCE OF TAXATION: This is the effect of tax and how the burden of tax is distributed between the seller and the buyer of a commodity. It is upon the person who pays it.
INCIDENCE ON DIRECT TAX – This is where the Incidence of a tax is borne by the person who pays it.
INCIDENCE OF INDIRECT TAX – This is where the Incidence Is borne mainly by the consumer, seller, or both depending on the elasticity of demand for the commodity.
COMMODITY WITH PERFECTLY INELASTIC DEMAND -This is when a tax is imposed on articles whose demands are perfectly inelastic. Here, the incidence of tax falls mostly on the consumers or buyers.
COMMODITY WITH PERFECTLY ELASTIC DEMAND – This is when a tax is imposed on a commodity with perfectly elastic demand. Here, the incidence of tax is borne entirely by the producers or sellers.