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Wednesday, February 21, 2018

What is Transaction Tax?

Tax which is used as a fee for every transaction made is called Transaction Tax. Whenever there is an exchange of money, between sources, someone or some system must be in place to help facilitate it and it requires a fee - this fee is the tax associated with transactions. If you make a large number of transactions, you might have to pay more transaction tax.

A picture of transaction tax being calculated.
A picture of transaction tax being calculated.

Features of Transaction Tax

Transaction tax is tax on transactions and is charged to individuals who make transactions, by the government. Some of the features of transaction tax are included in the following points:
  • Transaction tax is to be paid per transaction to help regulate transactions within a country.
  • Transaction taxes help the government keep tabs on services which offer payment gateways.
  • Transaction taxes charge a negligible amount per transaction which amounts to more per thousand or million transactions.

Benefits of Transaction Tax

Transaction taxes help the government function well by regulating the flow of money and making sure that transactions match the actions they are specified for. Some of the benefits of transaction tax are included in the following points:
  • Transaction tax helps keep transactions secure.
  • Transaction tax pays for upgrades in security, speed, convenience, and reliability.
  • Transaction taxes help to provide a fast, convenient service to people around the world, while keeping it free to exchange money with anybody.

Doubts of Transaction Tax

Transaction taxes may not be suitable in some sectors. Some of the doubts of transaction tax are included in the following points:
  • Transaction tax does not cover hand-to-hand transactions.
  • Transaction taxes could become very limiting in some cases.
  • Transaction taxes may not cover some types of transactions.

Paying Transaction Tax

Transaction taxes are automatically deducted on every transaction you make. Transaction taxes are taxes which are auto-deducted from every payment you make to a merchant or trader by an electronic system. Transaction tax helps keep services free to use in a country. Have you ever been charged for a transaction before?

Related Links About Transaction Tax

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