IGCSE Taxation
Download as PPT, PDF1 like2,159 views
This document discusses the impact of taxation on businesses. It defines different types of taxes such as direct taxes like income tax and corporation tax, and indirect taxes like value added tax and duties. An increase in income tax can lead to consumers cutting back on discretionary spending. A decrease in corporation tax provides incentives for businesses to reinvest profits and increase entrepreneurial activity. For indirect taxes, businesses must decide whether to absorb the increased costs or pass them on to consumers through higher prices, which could lower sales.
1 of 8
Downloaded 48 times
More Related Content
What's hot (20)
Ad
Similar to IGCSE Taxation (20)
Ad
More from Dulwich College Shanghai (11)
Recently uploaded (20)
IGCSE Taxation
- 1. IGCSE Business Unit 1.3.1 Impact of Taxation on Businesses
- 2. Introduction Monies paid to the government by individuals or organisations, to: • raise money to pay for public expenditure. • influence public behaviour. • redistribute income. • control the economy.
- 3. Types • Direct • Indirect • Progressive • Regressive • Specific • Ad Valorem
- 4. Direct Tax: changes and their Impact Income Tax • Increase = less disposable income. • Consumers cut back on income sensitive goods. E.g.?
- 5. Direct Tax: changes and their Impact Corporation Tax • Decrease • = more money for shareholders. • = incentive to reinvest profits! • = increased entrepreneurial activity
- 6. Indirect Tax: Changes and their Impact Types • Value added (vat)/ Goods and services tax (GST) • Duties on specific goods such as alcohol and tobacco • Tariffs on imports
- 7. Indirect Tax: Changes and their Impact Impact With increase in any of the above, firm must decide, whether to: • Absorb into costs? – charge same price, reduced profit margin. • Increase price? – maintains profit margin, lower sales. • Will consumers still buy the goods if tax passed on?
- 8. Student Task • Find a recent change in taxation in a country of your choice and explain how this has affected a particular business.