Income tax is a tax levied by the government on the income earned by individuals and businesses. The amount of income tax owed by an individual or business is typically calculated as a percentage of their taxable income.
In most countries, income tax is the largest source of government revenue. The tax is typically collected by the government through a system of withholding taxes from wages, salaries, and other types of income. Individuals and businesses are required to file an income tax return each year, which summarizes their income and calculates the amount of tax owed.
The rules and regulations surrounding income tax vary by country and can be quite complex. Some countries have progressive tax systems, which means that higher earners pay a higher percentage of their income in taxes, while others have flat tax systems, where everyone pays the same percentage of their income in taxes.
It’s important for individuals and businesses to understand their tax obligations and comply with the law to avoid penalties and fines. Many countries offer tax breaks and deductions to incentivize certain behaviors, such as charitable giving or investing in certain types of assets.
