Public Finance and International Organizations

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Subject: Economics

Semester: 2

Period: 5

Week: 26

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School Name:

Teacher’s Name:

Subject: Economics

Grade Level: Grade 12

Week & Period: Week 26, Period V

Date:

Topic: Public Finance and International Organizations
Sub-topic: Types of Taxes: Direct and Indirect Taxes

Instructional Objectives

By the end of this lesson, learners should be able to:

1. Differentiate between direct and indirect taxes.
2. Identify common examples of each tax type in Liberia.
3. Understand how each type affects different income groups.

 

Instructional Materials

• Taxation charts
• Case scenarios
• Diagrams of tax flow
• Whiteboard and markers

 

Previous Knowledge

Learners already know the sources of government revenue and the importance of taxation.

 

A – Anticipation (Engagement/Warm-Up)

Motivational Set (5 minutes) Ask:

“Which taxes do you think are harder to avoid—income tax or sales tax? Why?” Use learners’ responses to introduce the two types of taxes.

 

B – Building Knowledge (Development)

Teacher’s Explanation (20 minutes)

Direct Taxes:

• Taxes paid directly to the government by individuals or businesses.
• Based on income or profit.
• Examples: Personal income tax, company tax, property tax.
• Usually progressive (richer people pay more).

Indirect Taxes:

• Taxes imposed on goods and services.
• Paid indirectly through purchase.
• Examples: Value Added Tax (VAT), import duties, excise duties.
• Regressive in nature (affects lower-income earners more).

Key Differences:

Feature	Direct Tax	Indirect Tax
Who pays	Individuals directly	Collected via goods/services
Examples	Income tax, property tax	VAT, sales tax, customs duty
Equity	Progressive	Regressive
Visibility	More visible	Often hidden in price

 

Class Activity (10 minutes)

Create two labeled columns on the board. Have learners come up and write examples of direct and indirect taxes. Discuss each entry and correct if necessary.

 

C – Consolidation (Wrap-Up and Evaluation)

Teacher Summary (3 minutes) Summarize the definitions and key characteristics of both tax types. Emphasize the relevance of each in national development.

 

Assessment (7 minutes)

Multiple Choice:

1. Which of the following is a direct tax? A. Import duty
   VAT
   C. Income tax
   D. Sales tax
2. Indirect taxes are called ‘regressive’ because: A. They support agriculture
   Everyone pays the same regardless of income
   C. Only businesses pay them
   D. They are for rich people

Short Answer: 3. Define direct tax and give two examples. 4. Mention one disadvantage of indirect taxes.

 

Assignment

Interview two people (e.g., family or neighbors) about the taxes they pay. Record whether they are direct or indirect taxes and describe how they affect household income.

 

Teacher’s Reflection (Questions Only)

1. Could learners accurately identify and differentiate between direct and indirect taxes?
2. Did learners provide clear real-life examples of each tax type?
3. Were learners able to engage actively during the board activity?
4. Did learners understand the impact of these taxes on different income levels?
5. Was the objective of the lesson fully met?