Overview of Indirect Tax

Indirect tax refers to a type of tax that is collected by one entity in the supply chain, such as a manufacturer or retailer, and is ultimately paid to the government by the end consumer. Examples of indirect taxes include sales tax, excise tax, VAT, and service tax. These taxes are added to the cost of goods and services and passed on to the consumer. In the United States, indirect taxes such as sales tax, excise tax, and value-added tax are applied to the sale of goods and services. Indirect taxes can be passed on to another person or group, allowing businesses to recover the cost by charging higher prices to customers. During the American Revolution, indirect taxes were added to the cost of goods, instead of requiring direct payment from consumers. Overall, indirect taxes play a significant role in the taxation system and can have various types and implications depending on the country and context in which they are implemented.