Latest Posts
Home » Management » Value added tax (VAT)

Value added tax (VAT)

Value added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs.

VAT

Value added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale.

 

Value added tax (VAT) is a tax on consumer spending. It is collected by VAT-registered traders on their supplies of goods and services effected within the State, for consideration, to their customers. Generally, each such trader in the chain of supply from manufacturer through to retailer charges VAT on his or her sales* and is entitled to deduct from this amount the VAT paid on his or her purchases.

 

Value added tax (VAT) is a tax on the estimated market value added to a product or material at each stage of its manufacture or distribution, ultimately passed on to the consumer.