Ad Valorem Tax Meaning refers to a tax that is imposed on the value of the property or goods being taxed. The tax is charged as a percentage of the market value of items instead of charging a set fee. Some of the typical examples are property tax, car registration fees, and import duties. This type of tax will make sure that individuals with more valuable assets will pay higher, which will be fair in the tax regime. The governments measure the value on a regular basis in order to change the taxes. Essentially, Ad Valorem Tax makes sure that there is a proportional contribution of assets at their value and not equal or arbitrary contribution.
