Understanding VAT and Indirect Taxes

Value Added Tax (VAT) is a significant source of revenue for governments. Understanding how VAT works is essential for both consumers and businesses.

What is VAT?

VAT is a consumption tax placed on a product whenever value is added at each stage of the supply chain. Businesses must register for VAT if their taxable turnover exceeds a certain threshold.

Other Indirect Taxes

In addition to VAT, there are other indirect taxes such as excise duties and sales taxes that can affect pricing and consumer behavior.

Knowledge of VAT can help businesses price their products effectively.