A tax collected by an intermediary (such as a supplier) from the economic agent who bears the formal incidence of the tax (such as the customer). Taxes levied on goods or services, for example value-added tax or excise duties on alcohol and tobacco, are seen as indirect. These taxes are indirect because the tax payment to the revenue service is made by the firm selling the good but the tax is charged to the consumer. The extent to which the tax burden is shared between the supplier and the customer (the economic incidence) depends on the elasticities of supply and demand. See also incidence of taxation; tax shifting.