expenditure tax

expenditure tax

a form of INDIRECT TAX which is added to the selling price of a good or service and which is borne by consumers of these products. VALUE ADDED TAX, EXCISE DUTIES and CUSTOMS DUTIES are the main types of expenditure tax levied in the UK. Expenditure taxes, along with various taxes on income (see DIRECT TAX), are used by the government to raise revenue (see BUDGET) and as a means of regulating the level of spending in the economy (see FISCAL POLICY).

expenditure tax

a form of INDIRECT TAX that is incorporated into the selling price of a product and is borne by the consumer.

In raising revenue and applying FISCAL POLICY, governments have two broad choices: the use of taxes on expenditure and the use of taxes on INCOME (DIRECT TAXES). Taxes on income, such as INCOME TAX, deduct tax at source, whereas taxes on expenditure are levied at the point of sale. Direct taxes tend to be PROGRESSIVE TAXES insofar as the amount of tax paid is related to a person's income, whereas expenditure taxes are REGRESSIVE TAXES insofar as consumers pay tax in proportion to their spending, regardless of income.

In the UK, VALUE ADDED TAX, EXCISE DUTIES and CUSTOMS DUTIES are the main types of expenditure tax. See TAXATION, BUDGET ( GOVERNMENT).

References in periodicals archive ?
Among specific topics are a supplemental expenditure tax, allowances for corporate equity, designing anti-base-erosion rules for developing countries, exchange of information in developing countries, the value added tax and customs treatment of the mining industry in sub-Saharan Africa, and using anti-money laundering measures to improve tax compliance.
Tax experts say the chancellor is likely to announce the introduction of an investment allowance that will reduce the capital expenditure tax rate, a proposal the Treasury put forward last autumn.
This is like levying income tax and expenditure tax.
China, home to the world's second-largest and fastest-growing economy, has an income tax to expenditure tax ratio of less than 1 to 1.
With the enactment of three key bills (HEA 1001, HEA 1003, and HEA 1004), Indiana parents may now take advantage of a school expenditure tax deduction, school scholarships granted from private Scholarship Granting Organizations (SGOs) which are incentivized with a tax credit, and Choice Scholarships (generally referred to as vouchers) granted to low-income parents and funded by the state of Indiana.
A fundamental alternative to CIT model might be to implement an expenditure tax levied on the net cash flows of individual taxpayers and firms.
The limiting case of DIT when capital is not taxed at all is a proxy of a direct expenditure tax.
Given the attention that Fisher devoted to his expenditure tax proposal in those years, it is striking that Vickrey turned as a graduate student to income tax reform.
The enquiry should be far-reaching, and should extend to all aspects of the Australian taxation system -- to direct as well as indirect taxes -- and should compare that system with superior foreign systems (including flat-rate income tax systems that prevent bracket creep) and with two per cent expenditure tax systems, and make appropriate recommendations.
Regimes of type A and B are examples of an expenditure tax approach, while regimes C and D correspond to a comprehensive income tax approach.