A flat tax is a taxation system where a business pays a single, fixed tax rate on its income, regardless of the amount earned.
Unlike progressive tax systems, where rates increase with higher income levels, a flat tax applies the same percentage across all earnings. This approach simplifies tax calculations and compliance, making it easier for businesses to plan and manage finances.
Flat tax systems are often seen as fairer by proponents because all businesses are taxed equally, though critics argue they may disproportionately impact smaller firms. Some countries or regions apply a flat tax to corporate income or specific business sectors.