Indirect Taxes and Tariff Practice
The classification of a tax as indirect or direct usually hinges upon the point of its incidence. Indirect taxes are paid by a person who is expected to recoup himself directly from others. In the country the Treasury makes an official distinction between the two kinds of taxes. All duties levied directly on commodities or services, and collected by the Customs and Excise department, are classed as indirect taxes. Licence duties on liquor and other trades are regarded as direct, though there is nearly always a considerable element of indirect taxation. A tariff used for both revenue and other purposes normally has two or more sets of rates for each of the commodities taxed, whether the duties are customs or excise. In framing the excise side of a tariff due regard should be had to any geographical discrimination. A customs tariff designed for revenue purposes must be drawn up on similar principles to those underlying an excise tariff.