sales taxes

Taxes on Transactions



tax levy transaction
sale good goods and services
privilege instead manufacture
product petrol own/owner
other direct indirect
main type such
excise tariff general (2)
add cost subtract
price charge (2) customer
form like (2) corporation
single double apply/applied
triple rate different
many shift item
impose value increase
each stage distribution
specific include such
tobacco beverage license
franchise severance right (4)
activity motor participate
vehicle get married marry/married
hunt fishing pay/payment
carry (2) certain type
such as operate public
private utility facility
process resource nature/natural
such as timber natural resource
gas import petroleum
export provide protect
domestic foreign expensive
cheap industry competition
raise thus stamp (2)
duty (2) large transaction
use transfer property
share shares deposit


Taxes on Transactions

Taxes on transactions are levied on sales of goods and services, and on privileges. There are three main types of such taxes — general sales taxes, excise taxes, and tariffs.

General Sales Taxes

General sales taxes apply a single rate to the sales of many different items. Australia, Canada, and the United States impose sales taxes.

The value-added tax is a general sales tax levied in France, the United Kingdom, and other European countries. It is applied to the increase in value of a product at each stage in its manufacture and distribution.

Excise Taxes

Excise taxes are levied on the sales of specific products and on privileges. They include taxes on the sales of such items as petrol, tobacco, and alcoholic beverages.

Other excise taxes are the license tax, the franchise tax, and the severance tax.

License Taxes

The license tax is levied on the right to participate in an activity, such as selling alcoholic beverages, using a motor vehicle, getting married, or going hunting or fishing.

Franchise Taxes

Franchise tax is a payment for the right to carry on a certain kind of business, such as operating a restaurant chain, bus service or a public utility. Severance tax is levied on the processing of natural resources, such as timber, natural gas, or petroleum.


Tariffs are taxes on imported goods. Countries can use tariffs to protect their own industries from foreign competition. Tariffs provide such protection by raising the price of imported goods, thus making these goods more expensive than domestic products.

Stamp Duties

Stamp duties are taxes levied in Australia, New Zealand, and the United Kingdom on some large transactions. They are mainly used on transfers of property, shares, and bank deposits.

Indirect and Shifted Tax

General sales taxes and taxes on petrol and other products are called indirect taxes because they tax a service or privilege instead of a person.

Manufacturers and business owners pay these taxes, but they add the cost to the prices they charge their customers. These taxes, like corporation taxes, are a form of shifted taxes.

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1. What are taxes on transactions?

2. The three types of taxes on transactions are…..

3. Do general sales taxes vary or are the same for all products?

4. Can you explain the VAT (value-added tax)?

5. What are examples of excise taxes? Examples of excise taxes include….

6. Give examples of license taxes.

7. What are some examples of severance taxes?

8. What is the purpose of tariffs?

9. Define indirect and shifted taxes.
A. What do you think of all these taxes? Do you find them complicated?

B. Should transactions taxes be flat or should they vary?

C. Should certain taxes be eliminated? Should certain taxes be increased?

D. Sales taxes ought to be eliminated. Yes or no?

E. Alcohol, tobacco, and gasoline taxes need to be increased. Do you agree?

F. Tariffs need to be eliminated. What do you think?

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