Per unit tax

By contrast, an ad valorem tax is a charge based on a fixed percentage of the product value.

Per unit taxes have administrative advantages when it is easy to measure quantities of the product or service being sold.

Any tax will raise cost of production hence shift the supply curve to the left.

The term specific tax is mostly connected to tobacco taxation.

Using specific taxes has proved to be one of the most effective ways to reduce consumption, whereas ad valorem tax which is based on a per cent of product value may lead to substitution to cheaper brands.