Examples of indirect taxes.
1. Excise duties. This is a tax imposed on goods and consumed locally within a given country e.g. in Uganda taxes on beer products, soft drinks, soap, cooking oil, cigarettes etc.
2. Customs duty. This is a tax imposed on goods coming in or going out of the country depending on its volume and value.
- Import duty. This is a tax imposed on imported goods and it depends on the value and volume of the commodities imported. Most import taxes are meant to raise foreign exchange for the government and also to protect local industries from foreign competitions.
- (b) Export duty. These are taxes levied on goods going outside the producing country. Export duty is meant to raise revenue for the government and also discourage exports so as to satisfy the local demand first.
3. Expenditure tax. This is a tax payable on the expenditure of money on goods and services e.g. C.T.L. ( Commercial Transaction Levy)
4. Purchases sales tax. This is a tax levied to sellers or manufacturers whenever they sell units of their commodities
5. Value Added Tax: VAT is a multi stage indirect tax imposed on each sale through the production and distribution and distribution cycle of goods and services. VAT is a type of Ad valorem tax which is levied on value added at each stage of production and distribution of goods and services.
Many LDCs are advocating for VAT because it is broad based, it can't easily be avoided or evaded since it is multi stage, it is economical in terms of collection, and lastly because it is simpler and a fairer tax compared to sales tax.
6. Turn over tax: This is a tax levied on the total sales of a business regardless of the stage of production and distribution.
7. Sumthary tax: This is a tax imposed on consumption of goods and services which are considered undesirable or harmful to society as a way of discouraging their consumption
8. Octoro Tax: This is a tax imposed on goods in transit from one state through the territory of another state.