INDIRECT TAX Meaning and
Definition
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An indirect tax refers to a type of tax that is primarily imposed on goods, services, or activities rather than directly on individuals or income. It is a levy imposed by the government on the production, sale, or consumption of goods and services, which indirectly affects the individuals or businesses involved in such transactions.
Unlike direct taxes such as income tax or property tax which are directly levied on individuals or businesses, an indirect tax is typically imposed on goods and services during the various stages of production and distribution. This means that the burden of the tax is passed on to the end consumer, increasing the final price of the product or service.
Examples of indirect taxes include value-added tax (VAT), goods and services tax (GST), sales tax, excise tax, customs duty, and tariffs. These taxes are collected by the government through intermediaries such as manufacturers, wholesalers, and retailers while being ultimately borne by the final consumer.
Indirect taxes are often employed by governments to generate revenue and fund various public expenditures without directly impacting individuals' incomes. They are considered regressive in nature, as they tend to disproportionately burden low-income households who spend a larger proportion of their income on taxable goods and services.
Overall, indirect taxes play a crucial role in the modern taxation system, providing governments with revenue, influencing consumer behavior, and supporting public finance.
Common Misspellings for INDIRECT TAX
- undirect tax
- jndirect tax
- kndirect tax
- ondirect tax
- 9ndirect tax
- 8ndirect tax
- ibdirect tax
- imdirect tax
- ijdirect tax
- ihdirect tax
- insirect tax
- inxirect tax
- incirect tax
- infirect tax
- inrirect tax
- ineirect tax
- indurect tax
- indjrect tax
- indkrect tax
Etymology of INDIRECT TAX
The word "indirect tax" is derived from the combination of two words:
1. "Indirect": This term comes from the Latin word "indirectus", which is a combination of the prefix "in-" (meaning "not" or "without") and the verb "dirigere" (meaning "to direct" or "to guide"). In English, "indirect" refers to something that is not done in a straightforward or immediate way, often involving intermediate steps, processes, or influences.
2. "Tax": This word originates from the Latin noun "taxare", meaning "to appraise" or "to assess". It later evolved into "taxare" in Old French, which referred to a charge or duty imposed by the government on individuals or businesses for the purpose of public revenue.
Similar spelling words for INDIRECT TAX
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