A consumption tax is a type of tax levied on the purchase of goods and services. It is typically added to the price at the point of sale, meaning consumers pay the tax when they buy items. This tax can take various forms, such as a sales tax or a value-added tax (VAT), and is often used by governments to generate revenue. The main idea behind a consumption tax is to tax spending rather than income. This means that individuals who spend more will pay more in taxes, while those who save or invest their money may pay less. Consumption taxes can influence consumer behavior and are a significant source of funding for public services.