indirect tax

n. A tax, such as a sales tax or value-added tax, that is levied on goods or services rather than individuals and is ultimately paid by consumers in the form of higher prices.

indirect tax

n (Commerce) a tax levied on goods or services rather than on individuals or companies. Compare direct tax indirect taxation n

in′direct tax′

n. a tax levied on a commodity that is paid by the consumer as part of the market price. [1795–1805]

Thesaurus

Noun

indirect tax - a tax levied on goods or services rather than on persons or organizationsrevenue enhancement, tax, taxation - charge against a citizen's person or property or activity for the support of governmenthidden tax - a tax paid unwittingly by the consumer (such as ad valorem taxes)tariff, duty - a government tax on imports or exports; "they signed a treaty to lower duties on trade between their countries"excise, excise tax - a tax that is measured by the amount of business done (not on property or income from real estate)

Translations

impôt indirectimposta indiretta

indirect tax

Indirect Tax

A tax that is shifted to another person or entity. For example, sales taxes are levied on a seller but are paid by buyers; that is, the government expects sellers to pay the sales tax, but they pass the cost on to their customers. An indirect tax differs from a direct tax like a tax on income or assets, which the person or organization on whom they are levied must pay directly. There is disagreement as to whether a corporate tax is a direct tax or indirect tax.

indirect tax

A tax paid by an entity other than the one on which it is levied. For example, a retail sales tax is collected and remitted to the government by a business even though the tax is ultimately paid by the consumers. Compare direct tax.

indirect tax

a TAX imposed by the government on goods and services (which is incorporated into the product's final price) in order to raise revenues and as an instrument of FISCAL POLICY in managing the economy. The main forms of indirect tax in the UK are VALUE ADDED TAX, EXCISE DUTY and CUSTOMS DUTY. See BUDGET (GOVERNMENT), EXPENDITURE TAX.

indirect tax

a TAX levied by the government that forms part of the purchase price of goods and services bought by individuals (households) and businesses in order to raise revenue and as an instrument of FISCAL POLICY. Examples of an indirect tax are VALUE-ADDED TAX, EXCISE DUTY, SALES TAX and TARIFF.

Indirect taxes are referred to as ‘expenditure’ taxes since they are incurred when income is spent, unlike DIRECT TAXES, such as INCOME TAX, which are incurred when ‘income’ is received.

Changes in indirect tax can be used as part of fiscal policy to regulate the level of AGGREGATE DEMAND, increases in tax serving to reduce disposable income available for consumption spending, while decreases in tax increase disposable income. Indirect taxes can be used to affect the shape of demand as well as its level, increases in indirect tax serving to discourage consumption of socially disapproved products like cigarettes or alcoholic drinks, while reductions in indirect taxes encourage consumption of socially approved products like basic foodstuffs or books.

Unlike a DIRECT TAX, which varies according to the income of the taxpayer (PROGRESSIVE TAXATION), indirect taxes are regressive, insofar as the same amount is paid by each taxpaying consumer regardless of income. See TAXATION, REGRESSIVE TAXATION, INCIDENCE OF TAXATION.

indirect tax

indirect tax

indirect tax

in′direct tax′

indirect tax

indirect tax

indirect tax

Indirect Tax

indirect tax

indirect tax

indirect tax

indirect tax

Words related to indirect tax

noun a tax levied on goods or services rather than on persons or organizations

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