tax incidence may be both intentional and unintentional. In fact, economic subject may shift the tax burden to other economic subject by changing their market behavior. For example, tax imposed on the output of a firm's good may lead to higher consumer prices, reduced wages paid to firm's employees and reduced returns to firm's owners and shareholders or reduced supply of the good on the market, or any combination of mentioned consequences. Indirect taxes have substantial regressive impact on the distribution of income since indirect tax is usually imposed on goods and services irrespective of consumer's income. In practice, the effective indirect tax rate is higher for individuals with lower income, meaning that an individual with lower income spends on a good or service higher proportion of their income than an individual with higher income. For example, consider a good with $100 sales tax imposed on it. An individual with the income $10,000 pays 1% of their income as the tax while a poorer individual with income $5,000 pays 2% of their income. Moreover, the regressivity of indirect tax system impacts the total progressivity of tax systems of countries given the importance of indirect tax revenues in government budget and the degree of regressivity of indirect tax system, which ranges among countries. Furthermore, the extent of regressive nature of an indirect tax depends on the type of indirect tax. Empirical evidence suggests that excise taxes are in general more regressive than VAT. This could be attributed to the fact that excise taxes are levied on goods such as alcohol, tobacco, and these goods comprise a higher share of budgets among poorer households, while at the same time, poorer households are likely to consume goods with reduced VAT rates given that in some countries there is a VAT deduction on necessities such as food and medicine. As a result of the regressive nature of indirect taxes and the fact that they tend to be unresponsive to economic conditions, they cannot act as automatic stabilizers within the economy, unlike some of direct taxes. Indirect taxes, specifically excise taxes, are attractive because they have a corrective nature. Such taxes raise revenue and at the same time they correct a market failure through increasing price of the good and thus decreasing its consumption. Therefore, less revenue needs to be raised through other taxes, which could be more distortionary, to cover the market failure. The