Tax 5.Consumption Tax
A consumption tax is a tax on spending on goods and services. The term refers to a system with a tax base of comsumption. It usually takes the form of an indirect tax, such as a sales tax or value added tax. However it can also be structured as a form of direct, personal taxation: as an income tax that excludes investments and savings.A direct consumption tax is sometimes called an expenditure tax, a cash-flow tax, or a consumed-income tax, to name a few. Expenditure taxes of this kind have been briefly implemented in the past in India and Sri Lanka.
Consumption taxes are not regressive per se. However they are regressive on income because spending habits are regressive; some current proposals make adjustments to decrease these effects.