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Levy vs. Tax: Know the Difference

Shumaila Saeed
By Shumaila Saeed || Updated on December 25, 2023
A tax is a compulsory financial charge imposed by a government, while a levy is a specific type of tax, often charged for a particular purpose.
Levy vs. Tax

Key Differences

Levy typically refers to a charge imposed by an authority, often for a specific purpose, like a levy for flood defense. Tax is a broader term, referring to a compulsory financial charge imposed by a government to fund various public expenditures.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023
In the context of finance, a levy is often targeted and specific, such as an environmental levy for pollution control. A tax, however, is more general, like income tax, used to fund a wide range of government services and responsibilities.
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Shumaila Saeed
Nov 10, 2023
A levy can be seen as a type of tax but is usually distinct in its direct association with a specific benefit or service. In contrast, taxes are not typically earmarked for specific projects but go into the general revenue pool of the government.
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Shumaila Saeed
Nov 10, 2023
Examples of a levy include charges on specific goods, like a fuel levy, which directly relates to the consumption of that good. Taxes, such as sales taxes, are applied more broadly and are not directly linked to a specific government service.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023
Implementation-wise, a levy might be imposed in response to a particular situation or need, like a levy after a natural disaster. Taxes are more regular and systematic, forming a part of ongoing fiscal policy.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023
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Comparison Chart

Definition

Specific charge imposed for a particular need
Broad, compulsory financial charge for revenue
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Shumaila Saeed
Nov 10, 2023

Purpose

Often for specific projects or services
General funding of government services
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Shumaila Saeed
Nov 10, 2023

Example

Environmental levy for pollution control
Income tax for general government funding
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Shumaila Saeed
Nov 10, 2023

Association with Services

Directly related to specific benefits
Not directly earmarked for specific projects
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Shumaila Saeed
Nov 10, 2023

Implementation Characteristic

Often situational or targeted
Regular and systematic part of fiscal policy
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Nov 10, 2023
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Levy and Tax Definitions

Levy

A charge imposed by a government body.
The city imposed a levy on plastic bags to reduce waste.
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Shumaila Saeed
Nov 10, 2023

Tax

A percentage charged on transactions.
A value-added tax (VAT) is added to the price of goods and services.
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Shumaila Saeed
Nov 10, 2023

Levy

A charge for a specific project or service.
The levy on fuel was introduced to fund road maintenance.
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Shumaila Saeed
Nov 10, 2023

Tax

A contribution for the support of a government required of persons, groups, or businesses within the domain of that government.
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Shumaila Saeed
Oct 19, 2023

Levy

Raising funds in response to an emergency.
A levy was raised to support the flood relief efforts.
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Shumaila Saeed
Nov 10, 2023
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Tax

A fee or dues levied on the members of an organization to meet its expenses.
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Shumaila Saeed
Oct 19, 2023

Levy

Legal authority to seize property for unpaid debts.
The court issued a levy against the company's assets.
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Shumaila Saeed
Nov 10, 2023

Tax

A burdensome or excessive demand; a strain.
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Shumaila Saeed
Oct 19, 2023

Levy

To impose (a tax or fine, for example) on someone.
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Shumaila Saeed
Oct 19, 2023

Tax

To place a tax on (income, property, or goods).
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Shumaila Saeed
Oct 19, 2023

Levy

To impose a tax, fine, or other punishment on (a person or business).
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Shumaila Saeed
Oct 19, 2023

Tax

To exact a tax from
Taxed the people.
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Shumaila Saeed
Oct 19, 2023

Levy

To enlist or conscript into military service
Levy recruits.
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Shumaila Saeed
Oct 19, 2023

Tax

(Law) To assess (court costs, for example).
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Shumaila Saeed
Oct 19, 2023

Levy

To declare and wage (a war).
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Shumaila Saeed
Oct 19, 2023

Tax

To make difficult or excessive demands upon
A boss who taxed everyone's patience.
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Shumaila Saeed
Oct 19, 2023

Levy

To confiscate property, especially in accordance with a legal judgment.
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Shumaila Saeed
Oct 19, 2023

Tax

To accuse; confront
Taxed him with ingratitude.
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Shumaila Saeed
Oct 19, 2023

Levy

The act or process of levying.
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Shumaila Saeed
Oct 19, 2023

Tax

To hold accountable
The contractor was taxed with the mistake of the subcontractor.
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Shumaila Saeed
Oct 19, 2023

Levy

Money, property, or troops levied.
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Shumaila Saeed
Oct 19, 2023

Tax

Money paid to the government other than for transaction-specific goods and services.
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Shumaila Saeed
Oct 19, 2023

Levy

To impose (a tax or fine) to collect monies due, or to confiscate property.
To levy a tax
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Shumaila Saeed
Oct 19, 2023

Tax

A burdensome demand.
A heavy tax on time or health
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Shumaila Saeed
Oct 19, 2023

Levy

To raise or collect by assessment; to exact by authority.
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Shumaila Saeed
Oct 19, 2023

Tax

A task exacted from one who is under control; a contribution or service, the rendering of which is imposed upon a subject.
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Shumaila Saeed
Oct 19, 2023

Levy

To draft someone into military service.
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Shumaila Saeed
Oct 19, 2023

Tax

(obsolete) charge; censure
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Shumaila Saeed
Oct 19, 2023

Levy

To raise; to collect; said of troops, to form into an army by enrollment, conscription. etc.
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Shumaila Saeed
Oct 19, 2023

Tax

(transitive) To impose and collect a tax from (a person or company).
Some think to tax the wealthy is the fairest.
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Shumaila Saeed
Oct 19, 2023

Levy

To wage war.
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Shumaila Saeed
Oct 19, 2023

Tax

(transitive) To impose and collect a tax on (something).
Some think to tax wealth is destructive of a private sector.
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Shumaila Saeed
Oct 19, 2023

Levy

To raise, as a siege.
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Shumaila Saeed
Oct 19, 2023

Tax

(transitive) To make excessive demands on.
Do not tax my patience.
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Shumaila Saeed
Oct 19, 2023

Levy

(legal) To erect, build, or set up; to make or construct; to raise or cast up.
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Shumaila Saeed
Oct 19, 2023

Tax

(transitive) To accuse.
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Shumaila Saeed
Oct 19, 2023

Levy

The act of levying.
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Shumaila Saeed
Oct 19, 2023

Tax

(transitive) To examine accounts in order to allow or disallow items.
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Shumaila Saeed
Oct 19, 2023

Levy

The tax, property or people so levied.
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Shumaila Saeed
Oct 19, 2023

Tax

A charge, especially a pecuniary burden which is imposed by authority.
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Shumaila Saeed
Oct 19, 2023

Levy

The Spanish real of one eighth of a dollar, valued at elevenpence when the dollar was rated at seven shillings and sixpence.
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Shumaila Saeed
Oct 19, 2023

Tax

A charge or burden laid upon persons or property for the support of a government.
A farmer of taxes is, of all creditors, proverbially the most rapacious.
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Shumaila Saeed
Oct 19, 2023

Levy

A name formerly given in Pennsylvania, Maryland, and Virginia to the Spanish real of one eighth of a dollar (or 12½ cents), valued at eleven pence when the dollar was rated at 7s. 6d.
Shumaila Saeed
Shumaila Saeed
Oct 19, 2023

Tax

A task exacted from one who is under control; a contribution or service, the rendering of which is imposed upon a subject.
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Shumaila Saeed
Oct 19, 2023

Levy

The act of levying or collecting by authority; as, the levy of troops, taxes, etc.
A levy of all the men left under sixty.
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Shumaila Saeed
Oct 19, 2023

Tax

Especially, the sum laid upon specific things, as upon polls, lands, houses, income, etc.; as, a land tax; a window tax; a tax on carriages, and the like.
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Shumaila Saeed
Oct 19, 2023

Levy

That which is levied, as an army, force, tribute, etc.
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Shumaila Saeed
Oct 19, 2023

Tax

A disagreeable or burdensome duty or charge; as, a heavy tax on time or health.
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Shumaila Saeed
Oct 19, 2023

Levy

The taking or seizure of property on executions to satisfy judgments, or on warrants for the collection of taxes; a collecting by execution.
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Shumaila Saeed
Oct 19, 2023

Tax

A sum imposed or levied upon the members of a society to defray its expenses.
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Shumaila Saeed
Oct 19, 2023

Levy

To raise, as a siege.
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Shumaila Saeed
Oct 19, 2023

Tax

Charge; censure.
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Shumaila Saeed
Oct 19, 2023

Levy

To raise; to collect; said of troops, to form into an army by enrollment, conscription, etc.
Augustine . . . inflamed Ethelbert, king of Kent, to levy his power, and to war against them.
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Shumaila Saeed
Oct 19, 2023

Tax

A lesson to be learned; a task.
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Shumaila Saeed
Oct 19, 2023

Levy

To raise or collect by assessment; to exact by authority; as, to levy taxes, toll, tribute, or contributions.
If they do this . . . my ransom, then,Will soon be levied.
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Shumaila Saeed
Oct 19, 2023

Tax

To subject to the payment of a tax or taxes; to impose a tax upon; to lay a burden upon; especially, to exact money from for the support of government.
We are more heavily taxed by our idleness, pride, and folly than we are taxed by government.
Shumaila Saeed
Shumaila Saeed
Oct 19, 2023

Levy

To gather or exact; as, to levy money.
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Shumaila Saeed
Oct 19, 2023

Tax

To assess, fix, or determine judicially, the amount of; as, to tax the cost of an action in court.
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Shumaila Saeed
Oct 19, 2023

Levy

To seize property, real or personal, or subject it to the operation of an execution; to make a levy; as, to levy on property; the usual mode of levying, in England, is by seizing the goods.
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Shumaila Saeed
Oct 19, 2023

Tax

To charge; to accuse; also, to censure; - often followed by with, rarely by of before an indirect object; as, to tax a man with pride.
I tax you, you elements, with unkindness.
Men's virtues I have commended as freely as I have taxed their crimes.
Fear not now that men should tax thine honor.
Shumaila Saeed
Shumaila Saeed
Oct 19, 2023

Levy

A charge imposed and collected
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Shumaila Saeed
Oct 19, 2023

Tax

Charge against a citizen's person or property or activity for the support of government
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Shumaila Saeed
Oct 19, 2023

Levy

The act of drafting into military service
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Shumaila Saeed
Oct 19, 2023

Tax

Levy a tax on;
The State taxes alcohol heavily
Clothing is not taxed in our state
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Shumaila Saeed
Oct 19, 2023

Levy

Impose and collect;
Levy a fine
Shumaila Saeed
Shumaila Saeed
Oct 19, 2023

Tax

Set or determine the amount of (a payment such as a fine)
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Shumaila Saeed
Oct 19, 2023

Levy

Cause to assemble or enlist in the military;
Raise an army
Recruit new soldiers
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Shumaila Saeed
Oct 19, 2023

Tax

Use to the limit;
You are taxing my patience
Shumaila Saeed
Shumaila Saeed
Oct 19, 2023

Levy

An extra charge on top of existing ones.
The hotel added a levy for the use of resort facilities.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

Tax

Make a charge against or accuse;
They taxed him failure to appear in court
Shumaila Saeed
Shumaila Saeed
Oct 19, 2023

Tax

A compulsory contribution to state revenue.
Income tax is deducted from everyone's salary.
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Shumaila Saeed
Nov 10, 2023

Tax

A key tool in governmental fiscal policy.
The government adjusted the sales tax rate to manage inflation.
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Shumaila Saeed
Nov 10, 2023

Tax

A regular payment made to the government.
Property tax is paid annually on owned real estate.
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Shumaila Saeed
Nov 10, 2023

Tax

A source of funding for public services.
Taxes fund public services like education and healthcare.
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Shumaila Saeed
Nov 10, 2023

Repeatedly Asked Queries

What distinguishes a levy from a tax?

A levy is often for a specific purpose, while a tax is a broader charge for general government revenue.
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Shumaila Saeed
Nov 10, 2023

Can a levy be optional?

Levies are usually mandatory when imposed by an authority.
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Shumaila Saeed
Nov 10, 2023

Are taxes used for specific projects?

Generally, taxes go into the general fund and are not earmarked for specific projects.
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Shumaila Saeed
Nov 10, 2023

Are all taxes regular and systematic?

Most taxes are regular parts of fiscal policy, though some, like emergency taxes, can be situational.
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Shumaila Saeed
Nov 10, 2023

Do levies fund general government services?

Levies are typically targeted for specific services or projects, not general funding.
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Shumaila Saeed
Nov 10, 2023

What is an example of a levy?

An environmental levy for pollution control is an example.
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Shumaila Saeed
Nov 10, 2023

Is a property tax a levy?

Property tax is typically categorized as a tax.
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Shumaila Saeed
Nov 10, 2023

Can a levy be imposed for emergency situations?

Yes, levies can be imposed in response to emergencies or specific needs.
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Shumaila Saeed
Nov 10, 2023

Can taxes be targeted for specific services?

Taxes are generally for general government revenue, not typically targeted for specific services.
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Shumaila Saeed
Nov 10, 2023

Is a levy always a type of tax?

A levy can be seen as a type of tax but is typically more specific in purpose.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

Is sales tax a levy?

Sales tax is considered a tax, part of general fiscal policy.
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Shumaila Saeed
Nov 10, 2023

Is a fuel levy a tax?

A fuel levy is a specific charge on fuel and can be considered a type of levy.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

What is an example of a tax?

Income tax, a regular contribution to state revenue, is an example.
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Shumaila Saeed
Nov 10, 2023

Is VAT a tax or a levy?

Value-added tax (VAT) is a type of tax applied to goods and services.
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Shumaila Saeed
Nov 10, 2023

Do levies vary by region or country?

Yes, the nature and purpose of levies can vary significantly across different regions or countries.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

Does a tax always contribute to the general budget?

Yes, taxes typically contribute to a government's general budget.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

Is income tax a levy?

Income tax is generally considered a tax, not a levy.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

Are levies a common tool for local governments?

Yes, local governments often use levies for specific local projects or needs.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

Can a business impose a levy?

Businesses don't impose levies; they are typically imposed by government or legal authorities.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

Are levies part of regular fiscal policy?

Levies can be situational or part of broader fiscal measures but are usually more specific than regular taxes.
Shumaila Saeed
Shumaila Saeed
Nov 10, 2023

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Shumaila Saeed
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Shumaila Saeed
Shumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.

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