Governments employ indirect taxation as a tool to modify the prices of products and services in order to affect market outcomes. These taxes are charged on the production or sale of products and services rather than being applied directly on an individual's income or wealth. Governments can direct market forces and accomplish a number of policy goals by changing the costs related to particular items. Indirect taxation is a topic that is examined in this article along with the methods in which governments use it to influence markets.
Governments use indirect taxes as a crucial instrument to affect market outcomes and accomplish a number of policy goals. Indirect taxes can raise money, redistribute income, fix market imperfections, safeguard local industries, and advance specific governmental objectives through changing the cost of goods and services. As they negotiate the complex world of market intervention and work to build more equal and effective economies, businesses and governments must fully comprehend the function and effects of indirect taxation.