Explain briefly the following basic concepts used by the tax authorities in Uganda: 1. Tax base 2. Tax capacity 3. Tax buoyancy 4. Indirect and Direct taxes

1. Tax base: The tax base refers to the total amount of income, profits, property, or other factors that are subject to taxation. It is the foundation on which taxes are calculated and collected by the tax authorities.

2. Tax capacity: Tax capacity refers to the ability of individuals or businesses to pay taxes based on their income, assets, and economic activities. It is used by tax authorities to determine the appropriate level of taxation for different taxpayers.

3. Tax buoyancy: Tax buoyancy refers to the responsiveness of tax revenue to changes in the tax base. A tax system is considered buoyant if tax revenue increases in proportion to the growth of the economy or the tax base. This helps ensure that the tax system remains effective and sustainable over time.

4. Indirect and Direct taxes: Indirect taxes are taxes imposed on goods and services, such as value-added tax (VAT) or excise duties, which are ultimately paid by consumers when they purchase these goods and services. Direct taxes, on the other hand, are taxes imposed on individuals or businesses based on their income, profits, or assets, such as income tax or corporate tax.