Indirect taxation refers to taxes that are not directly levied on income or profits but are instead applied to the sale of goods and services.
These taxes are collected by businesses on behalf of the government and are paid by consumers as part of the purchase price. Unlike direct taxes, which are paid directly to the government by the taxpayer, indirect taxes are embedded in the cost of products.
Indirect taxes are a significant source of revenue for governments and can affect consumer choices and business pricing strategies.