The Value Added Tax

(VAT)

How this process works!

The value-added tax (VAT) is a fee that is put by a government in the production of goods or services anytime the project is sold. For tax purposes, value is added whenever the value of a product increases as a result of the application of a company's factors of production. With the VAT, the taxable amount is based on the value added at each stage of the process of producing goods and bringing them to market. No matter how many steps there are in the production process, a fixed percent of the final price of the product would represent the value-added tax