Hidden tax

Hidden Tax – A hidden tax is a tax that is not directly visible to the taxpayer because it is embedded in the price of goods or services, rather than being explicitly listed or separately charged. Consumers pay these taxes indirectly, often without realizing the exact tax amount included in the purchase. Hidden taxes can take various forms, including: Sales taxes incorporated into retail prices Excise taxes levied on specific goods like alcohol, tobacco, or fuel Import duties or tariffs added to imported products These taxes affect the overall cost of goods and services and can influence consumer behavior, pricing strategies, and corporate decisions.

Example: When buying a bottle of gasoline, the price per litre includes fuel excise taxes and state levies, which the consumer pays indirectly, making them a hidden tax.