Question

The main difference between sales and excise taxes is that:______.

Answer 1

Answer:

A

Explanation:

A tax is a compulsory amount levied on the goods and services by the government or an agency of the government. Taxes increase the cost of a product

A consumption tax is a tax that is levied on those that consume goods and services rather than produce goods and services

Examples of consumption tax :

1. excise tax
2. sales tax

A sales tax is an example of consumption tax. It is levied on the sales of goods and services. It is usually levied at the point of sale. An example is the value added tax.

An excise tax is a tax levied on certain goods and services at the point of sale e.g. tobacco

Differences between excise tax and sales tax

1. An excise tax applies  to a select list of products while a sales tax applies o a wide range of products
2. Excise tax is levied on a per unit basis while sales tax is levied as a percentage of purchase price