Value added tax (VAT) is a tax on goods and services that is added at each stage of production and distribution. It is known as an indirect consumption tax. Some goods and services may be exempt or taxed at lower rates to encourage consumption. VAT is collected by businesses from consumers but remitted to the government. VAT is considered regressive because it takes a greater portion of income from lower-income individuals compared to higher-income individuals. Tariffs are taxes on imported goods, intended to discourage imports and encourage domestic production. Excise duties are taxes based on quantity rather than value of certain goods, such as alcohol or tobacco, with the goals of both raising revenue and discouraging consumption. User taxes and charges are
Value added tax (VAT) is a tax on goods and services that is added at each stage of production and distribution. It is known as an indirect consumption tax. Some goods and services may be exempt or taxed at lower rates to encourage consumption. VAT is collected by businesses from consumers but remitted to the government. VAT is considered regressive because it takes a greater portion of income from lower-income individuals compared to higher-income individuals. Tariffs are taxes on imported goods, intended to discourage imports and encourage domestic production. Excise duties are taxes based on quantity rather than value of certain goods, such as alcohol or tobacco, with the goals of both raising revenue and discouraging consumption. User taxes and charges are
Value added tax (VAT) is a tax on goods and services that is added at each stage of production and distribution. It is known as an indirect consumption tax. Some goods and services may be exempt or taxed at lower rates to encourage consumption. VAT is collected by businesses from consumers but remitted to the government. VAT is considered regressive because it takes a greater portion of income from lower-income individuals compared to higher-income individuals. Tariffs are taxes on imported goods, intended to discourage imports and encourage domestic production. Excise duties are taxes based on quantity rather than value of certain goods, such as alcohol or tobacco, with the goals of both raising revenue and discouraging consumption. User taxes and charges are
This tax is levied on goods and services as a percentage of selling price. Also known as an _____ ______________ tax. Normally a fxed rate but some goods and services may be exempt or at a lower rate to encourage their consumption. E.g. _______________________ ___________________________________________________________________________ hat is the name of New !ealand"s value added tax# ______________________________________ hy are $alue Added Taxes known as regressive taxes# $alue Added Taxes are also levied on _________ ____________ components and materials bought by ________________% not &ust fnished goods and services bought by consumers. Tarifs (Defnition) Also called a customs ____________ or an impost. This tax is levied on the price of goods imported from overseas% as they enter a country. These taxes are to discourage people from buying imported goods and buy goods of domestic producers instead. 'igh tari(s can encourage illegal _____________________ which may mean borders have to be patrolled. This cost can be covered from revenue the government gains from ____________________________. Excise Duties (Defnition) These taxes are placed on certain goods based on )uantity *not value+ purchased. E.g. duties on___________________________________ Not only do these duties raise ____________ for the government% but most importantly they discourage consumption because they are damaging to health or to the environment. Excise duties that discourage harmful environmental actions are also called ____________ _______. User Taxes/Charges (Defnition) This type of excise duty is linked to specifc goods or activities. E.g. road , bridge , tunnel tolls% or congestion charges. Hypothecated Tax (Defnition) This -ser tax is levied to raise revenue for a specifc purpose such as paying for the cost of a road or public transport improvements. E.g. _____________________ bridge. ADVANTAGE !" INDI#ECT TA$E% &' Cost o( Collection .ndirect taxes are ___________ to collect. /ost of collection lies mainly with _________________________________________ )' *ider Tax +ase 0aid by young% old% employed% unemployed alike% not &ust by income earners. This spreads the e(ect of tax more evenly throughout the ___________________. ,' electi-e Ai.s /an be used to achieve specifc aims. E.g. discouraging consumption% improving the environment etc. /' Tax Alterations 1uicker and easier for government to impact on the marcoeconomy by changing indirect taxes rather than direct taxes. DIADVANTAGE !" INDI#ECT TA$E% &' Uncertainty A government can only guess how much people will spend on goods and services so will be uncertain as to how much ________________ indirect taxes will raise. This makes planning future public expenditure di2cult. .f actual revenues are less than forecasted% then the government will have a _________________ _______________ which will lead to unforeseen borrowing re)uirements. )' #egressi-e The burden in these taxes tends to be greater on _____________ people as they spend a greater proportion of their incomes than wealthier people. ,' In0ation These taxes add to the _____________ of goods and services and can therefore increase price in3ation. .f demand is very price _______________% a frm may not be able to pass the extra tax on to consumers. 0roducers argue that direct taxes increases _______________ and lowers __________________.