What kind of tax is levied on domestic goods?

The correct choice is an excise tax, which is specifically a tax levied on specific goods produced within a country. Excise taxes are typically applied to products such as alcohol, tobacco, and gasoline, and they are often included in the price of the product. The purpose of excise taxes can vary, including raising revenue for the government and discouraging the consumption of certain goods that may be considered harmful.

In contrast, a tariff is a tax imposed on goods when they are imported into a country, not on domestic goods. Capital gains tax pertains to the profit from the sale of an asset, such as stocks or real estate, and is not related to the taxation of goods as they are manufactured or sold within the country. Import duty is similar to a tariff, as it specifically targets goods coming from outside the country, rather than those produced domestically.

Therefore, an excise tax is uniquely structured to address domestic goods, making it the correct answer in this context.