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What is the difference between

taxing
to regulate trade and taxing to raise
revenue?

User Rayshun
by
3.7k points

1 Answer

13 votes

Answer:

Taxing to regulate trade is done to reduce the amount of a good that is purchased. Such taxes are usually higher than taxation for revenue as they are done to make the good so expensive that certain people will be unable to afford it. For instance, the alcohol levy of Botswana that was up to 40% at some point.

Taxation to raise revenue on the other hand, is not too high - as the government does not wat to restrict sales - and is simply imposed so the government can earn some revenue on goods sold. These can include Value Added Taxes for instance.

User Simon Mengong
by
4.6k points