Direct tax example:

**The reasoning** A **direct tax** is one paid directly by the person or business that earns the income or owns the property — the tax burden cannot be shifted to someone else. **Income tax** fits perfectly: when you earn a salary, *you* pay tax on it directly to the government. The person earning bears the cost. In contrast, **indirect taxes** are collected from one person but passed on to another. The seller collects it, but the buyer ultimately pays through higher prices. **Why the wrong options tempt you** - **VAT (Value Added Tax)** — This seems government-related, but it's *indirect*. Shops collect it from you when you buy goods, then remit it to government. You bear the burden, not the shop. - **Excise duty** — Charged on manufacturers (e.g., beer, cigarettes), but they pass the cost to consumers through higher prices. Indirect. - **Customs duty** — Importers pay this, but add it to the selling price. You, the buyer, ultimately foot the bill. Indirect. **Quick takeaway** If *you* earn it and *you* pay tax on it directly, it's a direct tax — think income tax, company tax, property tax.