The Aspect of the Customers in Taxation

The Aspect of the Customers in Taxation


Excise duty shall be payable on excise goods manufactured or imported products. Excise duty is generally still subject to Thus, excise duty increases the tax burden on a product more than just excise duty. Typical excise duties in Finland are alcohol, fuel tax on raw materials, tobacco and sweets. In the following, we present the general features of consumption taxation that involve important issues.

Who will end up being subject to consumption taxes?

From what factors what does a well-functioning consumption tax system consist of? We explain how the consumption tax the principle of universality stems from these factors. Towards the end of the chapter, we discuss where consumption taxation has been given tasks to guide consumption. From the part of the sellers, the c corp tax calculator is important in this case.

Who pays the consumption tax?

Consumption tax is paid to the taxpayer by the seller of the good. Caused by consumption tax However, the financial burden may be borne by the consumer or the business, regardless of whichever pays the tax. Consider a situation in which an asset is note tax. Let’s put a tax on it and see what happens to consumer prices. As consumer prices rise by almost the same amount as the tax burden, largely to consumers. With consumer prices rising only marginally, the burden is on companies. There is therefore a financial burden partly to different economic operators. This proportion is called the tax offense.

The Treatment of Taxation

In order to understand the treatment of consumption taxation, it is necessary to know how prices are generally formed. Think of a cup of coffee, for example price in the cafe. The cost is affected by the cost of producing it, for example the world market price for coffee, the cost of making a cup of coffee and cafe rental. The competitive situation is also an important factor. The only café in the village maintain a higher price level compared to a situation in which it would have we are competitors.

  • In addition, the price of a cup of coffee is affected by demand factors, how much people appreciate a cup of coffee. Consumption tax is one of the costs among others. The café operator would like to levy a tax on the price of a cup of otherwise he would have to compromise on his victory. This in turn would affect his ability to produce a certain amount of coffee.

On the other hand, the sensitivity of producers to change their behavior as prices increase how much an entrepreneur should raise the price. The tax treatment thus depends on both the reaction of producers and consumers. The party, whose behavior changes less, usually ends up paying the tax. For example, if the price increase does not reduce consumption, it is easier for the seller to export a higher tax on consumer prices.


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