What are the key aspects of consumption taxes?

Let’s explore some key aspects of consumption taxes: The value-added tax (VAT) is a widely used form of consumption tax, prevalent in most European countries and Canada. In some Canadian provinces, it is known as the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST).

What is the difference between income tax and consumption tax?

A consumption tax is charged when consumers spend money, while an income tax is assessed on earned money. Examples of consumption taxes include retail sales taxes, excise taxes, value-added taxes, use taxes, taxes on gross business receipts, and import duties. These taxes are borne by consumers who pay a higher retail price for the good or service.

What is an example of a consumption tax?

Retail sales tax and value-added tax are examples of a consumption tax. A consumption tax is charged when consumers spend money, while an income tax is assessed on earned money. Examples of consumption taxes include retail sales taxes, excise taxes, value-added taxes, use taxes, taxes on gross business receipts, and import duties.