There are two types of taxation terms that we come across – direct taxation and indirect taxation. Direct taxation is the process wherein the citizen directly pays the tax to the government. Another feature of direct tax is that individual citizens cannot pass it on from one person to another. Examples of direct taxation include income tax and corporate tax. The former applies to the income earned by an individual citizen, whereas the latter applies to the profits made by companies from their businesses.On the other hand, the tax levied on goods and services used by the taxpayer is known as indirect taxation. Contrary to direct taxation, individual citizens can shift indirect taxation from one person to another. Examples of indirect tax include GST.