Concept:An ad valorem tax is a tax calculated as a percentage of the monetary value of a commodity.
Explanation:"Ad valorem" is a Latin phrase meaning "according to value."
This means the amount of tax payable rises or falls with the price of the good.
For instance, a
5% ad valorem tax on a commodity valued at
$100 gives a tax of
$5.
If the same commodity is valued at
$500, the tax increases to
$25.
The tax is therefore not a fixed charge per unit, nor is it limited to imports, exports, or special goods.
It is levied directly on the price or worth of the commodity itself, as seen in sales tax and value-added tax.
Answer:D. the value of a commodity