Net Taxes on Production

Net Taxes on Production refers to taxes on production less subsidies on production. The taxes on production refers to the various taxes, extra charges and fees levied on the production units on their production, sale and business activities as well as on the use of some factors of production, such as fixed assets, land and labour in the production activities they are engaged in. In contrast to taxes on production, subsidies on production refer to the unilateral government transfer to the production units and are therefore regarded as negative taxes on production. They include subsidies on the loss due to implementation of government policies, price subsidies, etc.