(b) With respect to the three turnover taxes in China, namely, value added tax (VAT), business tax (BT) and consumption tax (CT):
State which two of the turnover taxes are mutually exclusive.
Value added tax (VAT) and business tax are mutually exclusive.
Briefly explain the purpose and effect of levying consumption tax.
Consumption tax is imposed to affect the consumption behaviour of people [on luxuries, harmful to health and environmentally unfriendly products].
Levying the tax can increase the price of the goods and so reduce the demand.