Indirect Tax

An indirect tax is a type of tax that is not directly paid by the taxpayer to the government. Instead, it is collected by an intermediary, such as a retailer or service provider, who then passes it on to the government. Common examples include sales tax and value-added tax (VAT). When you purchase goods or services, the cost often includes this tax, which means you effectively pay it indirectly as part of the price. Indirect taxes are significant for government revenue and can influence consumer behavior and spending.