A withholding tax is an amount an employer or payer deducts from a payment to a non-resident and pays directly to the government. It is commonly applied to dividends, interest, and royalties paid to foreign corporations or individuals. This mechanism ensures that the source country collects tax revenue on income generated within its jurisdiction before the funds are transferred overseas.

A duty is a form of indirect tax imposed by a government on the import or export of goods. While excise taxes are specifically on domestic production or consumption, the term 'duty' is the standard economic classification for taxes applied to international trade flows.

Excise duties are taxes imposed on the production, sale, or consumption of specific goods within a country, such as fuel, tobacco, or alcohol. Additionally, the term can refer to fees or licenses required for specific business activities or privileges, serving as a source of government revenue.

A capital gains tax is a levy imposed on the profit earned from the sale of an asset that has increased in value since its purchase. Assets subject to this tax typically include stocks, bonds, precious metals, and real estate. It is a fundamental component of tax systems designed to capture the economic gain realized by investors when they dispose of their holdings at a price higher than the original cost basis.

An increase in VAT acts as an indirect tax on consumption. Businesses typically pass these costs on to consumers, effectively increasing the final price of goods and services. As prices rise, the quantity demanded by consumers generally decreases, assuming the demand is price-elastic. Therefore, the immediate effect is an increase in costs for the consumer and a subsequent reduction in demand.

Direct taxes are paid directly by the entity or individual to the government, such as income tax. In contrast, indirect taxes are collected by intermediaries, such as retailers, from the consumer and then passed to the government. Value-added tax, custom duties, and tariffs are all examples of indirect taxes levied on the consumption or movement of goods.

Direct taxes are taxes paid directly by the person or organization on whom the tax is levied. Examples include income tax, corporate tax, and property tax. Unlike indirect taxes, which are collected by an intermediary (like a retailer) and passed on to the government, direct taxes are paid straight to the tax authority by the taxpayer.

A withholding tax is a government requirement for the payer of an item of income to withhold or deduct tax from the payment and pay that tax to the government. It is commonly applied to dividends, interest, or royalties paid to non-residents, ensuring the host country collects tax revenue on income generated within its jurisdiction.

Sales tax is an indirect tax imposed on the sale of goods and services. It is typically calculated as a percentage of the retail price and is collected by the retailer from the consumer at the point of purchase. The retailer then remits this collected tax to the government, making it a consumption-based tax that affects the final price paid by the end-user.

Capital gains tax is a tax imposed on the profit made from the sale of an asset that has increased in value. The gain is the difference between the sale price and the original purchase price (adjusted for costs). This tax is a common tool used by governments to generate revenue and influence investment behavior in financial and real estate markets.