Net Indirect Tex(NIT)

Net Indirect Tex refers to the difference between indirect taxes and subsidies. i.e.

                   NIT=Indirect Taxes - Subsidies.

The concept of NIT is very important to differenciate between factor cost and market  price of a commodity.

Therefore,

               Market Price= factor cost + NIT

               Factor Cost= Market Price - NIT.

Net Factor Income from Abroad(NFIA)

NFIA refers to difference between factor income received from the rest of the world (ROW) and factor income paid to the rest of the world. i.e.

                    NFIA= Factor income earned from abroad - factor income paid to the abroad.

NFIA is significant to differenciate between domestic income and national income. i.e.

                     National Income(NI)=Domestic income + NFIA.

                     Domestic income =National income - NFIA .