These are  taxes  which are levied  on peoples expenditure. They are normally  levied on goods and services consumed by the people. Indirect taxes are also known as expenditure  or outlay taxes. The incidence and impact  of  indirect taxes can be shifted as transferred to different persons.

Most  indirect taxes are either specific  or advalorem. A  specific  tax is a tax that is levied as a fixed amount  per unit of a commodity.

Advalorem tax is a tax levied as a percentage of the value of the commodity. Therefore with ad - valorem taxes, the amount paid in tax varies  directly  with the value purchases subject  to taxation.