Consumption Tax is a tax on the purchase of good or services. Consumption taxes can take the form of sales taxes, charges, excise and various other taxes on consumed goods and services. The term may also refer to any taxing system as a whole where people are taxed depending on how much they consume rather than how much they add to the economy (income tax). A consumption tax is a tax on investing in goods and services. The tax base of a real tax is the cash spent on consumption.