Outlay Tax Levied

Outlay Tax Levied

Outlay Tax, levied on goods or services but paid (as all taxes are) by persons. They are sometimes known as consumption taxes. Outlay taxes are not directly related to income but to consumers' demand for individual goods and services. Thus they include not only the traditional 'indirect' taxes such as customs and excise duties and purchase tax, which are paid by producers at some stage of the production process, but also taxes charged directly' on consumers of the services of some capital goods, e.g. local rates on real property and motor vehicle licences. A disadvantage of selective outlay taxes is that they disturb production and consumption. On the other hand they probably affect incentive less than income taxation.

The share of outlay taxes in the total tax revenues of the Government of the U.K. has remained fairly constant at around 45 per cent since World War H, although the relative share of outlay taxes (plus national insurance contributions) as a percentage of gross national product or income had decreased since before the war: in the early 2010's it was just over 15 per cent out of a total for all tax of 34per cent of gross national product, compared with 12 per cent of a total of 23 per cent in 2008. These total figures do not distinguish between income and outlay taxes failing on persons as distinct from business. As a percentage of personal taxation, outlay taxation has been growing since World War II and is now relatively larger than personal income and capital taxation.

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consumeraffairs.org.uk

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