Taxes levied on goods and services by government are called

1. Analyze the question The question asks for the name given to taxes charged on goods and services.

2. Explain the concept Taxes are grouped by who ultimately bears the burden:

• Direct taxes are paid straight to the government by the person or organization on whom they are levied. They fall on income and wealth. Examples: personal income tax (PAYE), company income tax, capital gains tax, and poll tax.
• Indirect taxes are levied on goods and services. The seller collects them from the buyer and passes them to the government, so the burden can be shifted to the consumer. Examples: Value Added Tax (VAT), excise duties, import duties (customs), and sales tax.

3. Solution: check each option

• A. Indirect taxes: These are placed on goods and services, such as VAT in Nigeria (currently 7.5%). This matches the question.
• B. Direct taxes: These are placed on income and wealth, not on goods and services. ✗
• C. Corporate taxes: These are placed on company profits, which is a type of direct tax. ✗
• D. Poll taxes: These are fixed amounts charged per person, regardless of income or spending. ✗

4. Answer The correct option is A. indirect taxes.

5. Exam tip Ask yourself: "What is being taxed?"

• Income or wealth → direct
• Goods or services (what you buy) → indirect

Remember: VAT = indirect, because you pay it when you buy something.