What is Ad Valorem Tax and what is the significance of this?

Ad Valorem Tax is a value tax used by the governments on goods, services or properties based on the value. It is significant in that it promotes fairness in taxation, whereby those who have the possession of high-valued assets will have to pay more. The most common example is property taxes, which are used to finance key services, such as schools and roads. The ad valorem taxes respond to the market conditions by automatically increasing with the increase in the value of property. Nevertheless, correct evaluations are important to prevent undue burdens. It is a foundation of sound and equitable public revenue systems because it is flexible in nature. What Is Ad Valorem Tax

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