A Pigovian tax is a tax assessed against businesses and private individuals that engage in activities that create adverse side effects for society. Those can include environmental pollution, strains on public healthcare systems from the sale of tobacco products, or any other side effects that have an external, negative impact.

Pigovian taxes were named after English economist Arthur Pigou, a significant contributor to early externality theory. Pigou also promoted the link between the balance of consumption, employment, and price, known as the Pigou effect.