Cost Of Goods Sold Tax (COGS) is a form of taxation imposed by governments on the costs incurred when producing items for sale. It’s an important factor in the pricing of goods and services, as it affects the profits that a company can make. At its most basic level, COGS Tax is a tax on the cost of materials, labor, and other costs associated with creating a product. It’s also referred to as “inputs tax” as it takes into account the inputs required to manufacture a good or service. COGS Tax helps businesses stay competitive in the marketplace while ensuring they comply with government regulations. Ultimately, this keeps prices fair and encourages healthy competition among businesses.