Economics GCSE
Indirect taxes
What Indirect taxes means in Economics GCSE, as defined for AQA.
Definitions of Indirect taxes
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Reference: AQA
These raise production costs for goods with negative externalities, shifting supply left and reducing consumption towards the socially optimum level.
Taxes levied on goods and services, collected by an intermediary such as a retailer from the consumer who bears the ultimate economic burden.
Taxes levied on expenditure, specifically on goods and services, and the burden can often be shifted from the producer to the consumer.
Taxes levied on spending, such as Value Added Tax and excise duties on goods like fuel and alcohol.
Taxes whose increase causes a decrease in supply, shifting the supply curve to the left.
Topics that use Indirect taxes
- Government income and expenditure (AQA GCSE)
- Misallocation of resources (AQA GCSE)
- Supply for goods and services (AQA GCSE)
Related terms
- Budget deficit
- Budget surplus
- Change in supply
- Costs of production
- Direct taxes
- Economic welfare
- External shocks
- Externalities
Using Indirect taxes in the exam
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