The definition of indirect tax is: "A tax on the revenue of a corporation rather than the capital invested in it; a tax on the revenue derived from sales, rather than that derived from ownership of property used in business."
An indirect tax is often termed "a consumption tax", as distinct from a direct tax, which can be levied at various points within the supply chain (e.g. on production before its sale to consumers, or on consumption after sale to consumers), or which can be levied on a transaction-by-transaction basis (e.g., value-added taxes), generally without any additional cost to users (as opposed to indirect taxes).
An indirect tax is a type of tax that is first paid by the buyer and then passed on to the seller. An indirect tax is usually imposed for consumption, for example, sales taxes. Because it's not paid directly by the buyer in most cases, this type of tax can be considered regressive because someone with no income or without much money will have to pay a greater proportion than someone with more income or wealth. The requirement to pay a substantial amount of these types of taxes might make certain goods less affordable in comparison to stores outside the country it operates in. This could also make imports more expensive and sometimes unavailable at all due to higher tariffs imposed by some countries when they import goods from other countries that have similar indirect taxes in place.
An indirect tax is often termed "a consumption tax", as distinct from a direct tax, which can be levied at various points within the supply chain (e.g. on production before its sale to consumers, or on consumption after sale to consumers), or which can be levied on a transaction-by-transaction basis (e.g., value-added taxes), generally without any additional cost to users (as opposed to indirect taxes).
An indirect tax is a type of tax that is first paid by the buyer and then passed on to the seller. An indirect tax is usually imposed for consumption, for example, sales taxes. Because it's not paid directly by the buyer in most cases, this type of tax can be considered regressive because someone with no income or without much money will have to pay a greater proportion than someone with more income or wealth. The requirement to pay a substantial amount of these types of taxes might make certain goods less affordable in comparison to stores outside the country it operates in. This could also make imports more expensive and sometimes unavailable at all due to higher tariffs imposed by some countries when they import goods from other countries that have similar indirect taxes in place.
