A compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.

The term “income tax” refers to a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction.

A value-added tax, known in some countries as a goods and services tax, is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer.

In Nepal, the taxes are classified in to two types, direct taxes and indirect taxes. Indirect Taxes are those which are not paid directly by the individual or organization to the imposing authority. They are levied on goods and services and not on income and profits.