Distorting effects of commodity taxes on the transaction of goods and nonfactor services
Nature
In most developing countries commodity taxes account for 50 to 70% of of all tax revenue. Governments often rely heavily on the domestic production taxes that distort the transactions between producers. Succeeding transactions add tax to that already paid previously by producers or distributors. The price of outputs increases and generates differential taxation of consumption.
Broader
Aggravates
Strategy(ies)
Value(s)
Type
(E) Emanations of other problems