Answer to Question #203356 in Finance for Chulumanco

Question

Discuss the personal income tax base and explain how it differs from the comprehensive income tax base.

Answer 1

Personal income tax is a taxation system that the government imposes on income generated by individuals. ... This type of income tax is levied on an individual's wages, salaries, and other types of income such as pensions, interest, and dividends.

Corporate tax is an expense of a business (cash outflow) levied by the government that represents a country's main source of income, whereas personal income tax is a type of tax governmentally imposed on an individual's income, such as wages and salaries.

• Corporate tax is a direct tax paid by businesses to the government on their earnings. The funds collected from the taxes serve as a country’s source of income and are directed to financing various projects for the benefit of its citizens.
• The maximum corporate tax rate equal to 35%.
• Personal income tax is a direct tax paid by individuals to the government on their personal income coming from monthly salaries and wages.