Meaning & use
indirect taxes
Last updated
Meanings
nounpluralbusinessfinance
Taxes charged on goods and services rather than on a person's income or property directly.
Grammar: Always plural in this form; the singular "indirect tax" refers to one such charge.
Patterns
- indirect taxes on something
- pay indirect taxes
- raise indirect taxes
- cut indirect taxes
In many countries, indirect taxes make up a large share of government revenue.
The government raised indirect taxes on fuel and alcohol last year.
Because indirect taxes are included in the price, shoppers often do not notice them.
nouncountablebusinessfinance
A tax of this type collected by a seller or supplier and then passed on to the government.
Grammar: Countable when referring to one specific tax of this kind: an indirect tax, several indirect taxes.
Patterns
- an indirect tax on something
- impose an indirect tax
- collect an indirect tax
Value-added tax is a common example of an indirect tax.
The new indirect tax applies to imported electronics.
Retailers collect this indirect tax at the point of sale and send it to the tax office.
Word forms
| singular | indirect tax |
|---|
Common combinations
- indirect taxes on goods
- Indirect taxes on goods tend to hit poorer households harder.
- raise indirect taxes
- The budget proposes to raise indirect taxes instead of income tax.
- cut indirect taxes
- Politicians promised to cut indirect taxes before the election.
- a form of indirect taxation
- A sales tax is a simple form of indirect taxation.
- indirect tax burden
- The indirect tax burden falls on anyone who buys the product.
- levy indirect taxes
- Local councils cannot levy indirect taxes on their own.
Synonyms and how they differ
- consumption taxes
- A narrower, more technical term for taxes on spending; use it when writing about economics rather than everyday policy.
- sales taxes
- Refers specifically to taxes added when something is sold, so it covers only part of what indirect taxes include.
- excise duties
- These are indirect taxes on particular goods such as fuel or tobacco, not the whole category.
Opposites
Word family
- indirect taxation noun
- The system or practice of charging taxes of this kind.
- indirect taxpayer noun
- A person who effectively pays such a tax through higher prices.
Commonly confused: indirect taxes or direct taxes? indirect taxes or tax evasion?
indirect taxes vs direct taxes
Direct taxes are paid straight to the government by the person who owes them, such as income tax; indirect taxes are collected through a purchase.
indirect taxes vs tax evasion
This means illegally not paying tax, while indirect taxes are simply a type of tax.
Practice
Which sentence uses "indirect taxes" correctly?
Choose one answer.
Indirect taxes are collected by sellers when customers buy things, so the shop collecting them at the checkout fits. The other options describe income or profit taxes, which are direct taxes.
Make it your own
Write a sentence using “indirect taxes”, then check it and compare it with the examples above.