Per unit tax

A per unit tax, or specific tax, is a tax that is defined as a fixed amount for each unit of a good or service sold, such as cents per kilogram. It is thus proportional to the particular quantity of a product sold, regardless of its price. Excise taxes, for instance, fall into this tax category. By contrast, an ad valorem tax is a charge based on a fixed percentage of the product value. Per unit taxes have administrative advantages when it is easy to measure quantities of the product or service being sold.

External links


This article is issued from Wikipedia - version of the 2/24/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.