Indirect Tax
Tax paid indirectly through intermediary; typically on products.
Formula
Tax Burden on Consumer = Price After Tax − Price Before Tax
Real World
The UK government charges 20% VAT on most goods and 57.95p per litre excise duty on petrol — these indirect taxes raise prices for consumers and generate billions in government revenue annually.
Exam Focus
Distinguish indirect from direct tax clearly; VAT is regressive — this evaluation point is frequently rewarded in higher-mark answers.
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