What is an example of a consumption tax?

Retail sales tax and value-added tax are examples of a consumption tax. A consumption tax is charged when consumers spend money, while an income tax is assessed on earned money. Examples of consumption taxes include retail sales taxes, excise taxes, value-added taxes, use taxes, taxes on gross business receipts, and import duties.

What are the key aspects of consumption taxes?

Let’s explore some key aspects of consumption taxes: The value-added tax (VAT) is a widely used form of consumption tax, prevalent in most European countries and Canada. In some Canadian provinces, it is known as the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST).

What are income taxes & Consumption taxes?

These typically include income taxes and property taxes. Both income and consumption taxes are taxes on your money, but they apply at entirely different times. An income tax applies when you earn money such as wages, interest and dividends. Consumption taxes apply at the time goods and services are purchased and sold.