A direct tax is paid directly by an individual or organization to an
imposing entity. A taxpayer, for example, pays direct taxes to the government for different purposes, including real
property tax, personal property tax, income tax or taxes on assets. Direct taxes are different from indirect taxes,
where the tax is levied on one entity, such as a seller, and paid by another, such as a sales tax paid by the buyer
in a retail setting. Direct taxes are based on the ability-to-pay principle.