Direct Tax (redirected from Direct taxation)

direct tax

A tax paid by the individual or organization on which it is levied. For example, the personal income tax is levied on individuals, who end up bearing the entire burden of the tax. A direct tax cannot be shifted from the entity on which it is levied. Compare indirect tax.

---

Direct Tax

A tax that cannot be shifted to another person or entity. For example, taxes on income or assets are direct taxes, as the person or organization on whom they are levied must pay them directly. Direct taxes differ from indirect taxes, such as sales tax, which is levied on a seller but is paid by buyers. There is disagreement as to whether a corporate tax is a direct tax or indirect tax.