What is consumption tax (CT)?

CT is a turnover tax levied on manufacturers and importers of specific luxury goods.

The objectives of levying consumption tax consist of three aspects:

a)Increase the fiscal revenue without significant negative effect on overall market demands as the demands for goods subject to CT are relatively inelastic

b)Reallocate social wealth since it is imposed on luxury or non-essential goods

c)Discourage the consumption of goods that have adverse effects on public health