Types of VAT Tax
Types of VAT (Value-Added Tax): Features & Advantages
VAT stands for Value-Added Tax. It is a consumption tax imposed on the value added to goods and services at each stage of the production and distribution chain. VAT is a type of indirect tax, meaning it is ultimately borne by the end consumer but collected and remitted to the government by businesses at various stages of the supply chain. VAT is widely used around the world as a revenue-raising mechanism for governments. It is considered to be relatively efficient and difficult to evade compared to other forms of taxation.
Key Takeaways:
- VAT is an indirect tax levied on the consumption of goods and services.
- VAT is calculated based on the value added to goods or services at each stage of production or distribution.
- VAT is a widely used taxation system employed by numerous countries around the world.
Table of Content
- Types of VAT Tax
- 1. Traditional VAT
- 2. Flat Rate VAT
- 3. VAT with Reduced Rates
- 4. Exempt VAT
- 5. Zero-Rate VAT
- Conclusion