Ad valorem tax

Subject – Economy

Context – States charge ad-valorem tax on fuel prices.

Concept –

Ad valorem tax, any tax imposed on the basis of the monetary value of the taxed item. Literally the term means “according to value.”
An ad valorem tax is a tax based on the assessed value of an item, such as real estate or personal property.
The most common ad valorem taxes are property taxes levied on real estate.
It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT).