Proportional Tax
This is the system of taxation where the marginal rate of tax
remains constant as income increases or decreases. It takes the
same percentage of taxpayers’ income any level of income.
Examples include Petroleum Profit Tax (85%), Capital Gains Tax (10%), etc
Regressive Tax
This the system of taxation where the marginal rate of tax
decreases as income increases. It takes a smaller
percentage of taxpayers’ income as income increases.
Example includes Consumption/Expenditure Taxes like
Value Added Tax (VAT), Poll Tax which is levied at a
fixed rate per person regardless of income, and Toll Duty.
Progressive Tax
This is the system of taxation where the marginal rate of tax
increases as income increases. It takes a larger percentage of
taxpayers’ income as income increases. Example includes Personal Income Tax.