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Ad Valorem Tax

An ad valorem tax is a tax that is based on the value of a product or service, rather than on the quantity or weight of the item. The term "ad valorem" is Latin for "according to value."

One example of an ad valorem tax in the UK is Value Added Tax (VAT), which is a consumption tax that is applied to most goods and services at a rate of 20%. VAT is calculated as a percentage of the final sale price of the item, and it is included in the price that consumers pay.

See also

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