When it comes to taxation, it is important to understand who ultimately bears the burden of a particular tax. In the case of indirect taxation, the goal is for the tax to be paid by consumers through their consumption, meaning that the entrepreneur who supplies goods or services will adjust their prices to pass on the tax to the consumer. This is known as "forward shifting." However, in some cases, entrepreneurs may have to absorb a portion of the tax, resulting in a "backward shift." This determination of the economic entity responsible for paying a tax is a crucial aspect of understanding finance.
