Notes on both sections of Economics of Tax to cover section C of exam, Study notes of Business Taxation and Tax Management

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3/6/25, 3:16 PM about:blank Economics of Tax - Lecture notes 5/6 Int jon nomi Taxation + Part of price of living in organised society + Tax system — Represents social, political and economic needs at that point in time — Recently used as a way of repairing the economy following 2008 crash and locally the drop in oil price — Ifneeds change then tax system must change — No tax system perfect Importance of tax system + Tax system — central role in modern economies + Accounts for a substantial portion of national income - 30% of income + Many countries seeking to address fiscal deficits by raising money through tax — Importance of structure of tax systems paramount Main objectives ~ Taxation + To raise revenue ~ for government spending + To redistribute income and wealth - equality + Toact as an economic regulator — regulating cigarettes/alcohol + To encourage harmonisation — industries and policies (green taxes) Classification of taxes Who bears burden of taxation (Incidence of tax) — Income — Income tax — individual — Corporation tax — company/shareholders/employees — Wealth/ Capital — Capital gains tax - — Inheritance tax — Consumption — VAT Direct/Indirect + Direct — Levied directly on person intended to pay tax + Income Tax * Corporation tax + Capital gains tax + Inheritance tax + Indirect — Borne by person other than person tax collected from + VAT 4/15