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Theme 1
1.2) How markets work
9). Indirect Taxes and Subsidies
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Created by
Chibuike Oluigbo
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Cards (5)
What is an Indirect
Tax?
It is a
tax
levied
on
expenditure
on
goods
or
services.
What is the 'Incidence of a tax'?
It is the
way
in
which
the
burden
of
paying
a
sales
tax
is
divided
between
producers
and
consumers.
What is a Specific Tax?
A
sales
tax
that is
set
at a
fixed
amount
per
unit
of
sales.
What is an Ad Valorem Tax?
A
sales
tax
charged
as a
percentage
of the
price
of a
good
/
service.
What is a Subsidy?
A
grant
given
by
the
government
to a
firm
to
encourage
the
production
of a
good
or
service.
