Chapter 16 - Taxation

• taxation is a levy imposed by government on individuals and businesses
• reasons for taxation - government revenue, redistribution of wealth and discouraging consumption
• direct taxation - taxes levied on the income earned by a household or businesses and paid directly to the government
• indirect taxation - taxes levied on what people spend, rather than earnings
• excise duty - a tax paid on certain goods such as alcohol and tobacco products and is used by government to discourage consumption of these items
• customs duty - a tax levied on goods imported to Ireland from countries outside the European Union
• progressive tax - taxes that impose higher rates for those on higher incomes
• regressive tax - the amount of tax is levied uniformly