Indirect Taxes

Indirect taxes can also be levied on imported goods, such as customs duties levied on certain goods imported to Norway from abroad. The VAT is a general tax levied on almost all goods and services, while excise and customs duties are levied on particular goods. The Norwegian parliament decides the tax rates as part of the annual budget.

Indirect taxes can either be specified as a value tax (i.e. as a percentage of the price of a good) or as a unit tax (i.e. as a price per unit or per amount).

Indirect taxes can be levied for fiscal reasons, i.e. to raise revenue for the government, or to counteract the external effects of consumption and production (e.g. "green" taxes). Attaching a price to external effects encourages consumers and producers to take these externalities into consideration in their economic decisions. Revenues from indirect taxation are not earmarked transfers, and are used to finance public expenditure, investments and public transfers.