What Is Value Added Tax (vat)? – Accountants In Islamabad
October 26, 2022 ⚊ 1 Min read ⚊ Views 75 ⚊ BUSINESS
The value-added tax, also known as VAT, is a form of indirect tax that is levied on taxable goods and services for the value added at each stage of the production or distribution cycle, beginning with the purchase of raw materials and continuing all the way through to the purchase of the finished product at retail. On April 1, 2005, the VAT was first implemented. In accordance with it, the amount of value addition that occurs at each stage is first determined, and then tax is imposed on the same amount. When purchasing items, the final consumer is ultimately responsible for paying the entire VAT; customers who participate in earlier phases of manufacturing are eligible for refunds of the tax that they have already paid. VAT is considered a consumption tax as well due to the fact that the whole tax burden is borne by the consumer.
