|Origin principle of taxation|
An international trade policy according to which goods and services are taxed in the country of production, regardless of the country of consumption. The advantages are a lower potential for tax fraud and an absence of need for border controls on trade flow, since exports do not travel tax-free. The disadvantage is the possibility for the tax system to discriminate between domestically produced goods and imports. See also destination principle of taxation.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|