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A negative tax is a subsidy, no? In Pakistan, electricity rates are slabbed. 0-100 units are charged very little - often below cost of providing the electricit
by abdullahkhalids 3y ago
A negative tax is a subsidy, no?
In Pakistan, electricity rates are slabbed. 0-100 units are charged very little - often below cost of providing the electricity. 100-200 units more, etc. So ultimately, high consumption users subsidize low consumption users. It makes sense because low consumption users are 'using' cheap electricity from hydropower/gas, but high consumption users are forcing the state to turn on expensive oil based power plants.
- StreetChief 3y agoWell I was thinking more along the lines of the price of a good is x, plus y taxes, reduced by -z tax. Subsidys might effectively be similar, but it won't be calculated the way "positive" taxes are.
- abdullahkhalids 3y agoHmmm. Don't know about the electricity market. But, again in Pakistan's Punjab province, at restaurants, if you pay by cash, sales tax is 19% and if you pay by card, sales tax is 5%. It's a method by the state to increase the size of the formal economy.