MANAGEMENT

Detailed explanation-1: -An ad valorem tax is a tax that is based on the assessed value of a property, product, or service. The most common ad valorem tax examples include property taxes on real estate, sales tax on consumer goods, and VAT on the value added to a final product or service.

Detailed explanation-2: -an ad valorem payment, rate, or tax is calculated according to the price of a product or service, rather than at a fixed rate: Companies receive subsidies in the form of simple ad valorem payments based on the size of their export sales.

Detailed explanation-3: -Ad valorem rates, which have come into increased use, have the important advantage of adjusting the tax burden according to the amount the consumer spends on the taxed items. They thus avoid the serious discrimination of specific rates against the low-priced varieties of the commodities.

Detailed explanation-4: -An ad valorem tax (Latin for “according to value") is a tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT).