What Is Value Added Tax (Vat) And How It Works?
Value Added Tax Free Stock Photo Public Domain Pictures from www.publicdomainpictures.net Value Added Tax, or VAT as it is commonly known, is a type of sales tax levied on goods and services purchased in countries that are members of the European Union (EU). It is a tax that is paid by the customer at the time of purchase, and is then passed on to the national government. It is a form of indirect tax, meaning that it is collected by the seller, but ultimately paid by the consumer. It is also one of the most common forms of taxation in the world, with over 150 different countries having a VAT system in place. The purpose of VAT is to raise revenue for the government, while at the same time creating an equitable tax system that is fair to both businesses and consumers. VAT is a progressive tax, meaning that the rate of taxation increases as the value of goods and services purchased increases. This means that the more expensive items are taxed at a higher rate than the less expensive ...