Question

how would vat reduce the evasion of taxes on goods

Answer 1

The answer for u is given below in the attachment

Answer 2

Explanation:

1. A VAT means Value Added Tax in which the tax is charged on every production process of a commodity.

2. Any increase in the worth in each time of the production it will be imposed by VAT.

3. When the tax is levied in every stage of production, it becomes very difficult to evade the tax.

4. Tax evasion is illegal evasion of the tax by the individuals. When the tax is included in all the stages of the production, it will reduce the evasion of the tax by the individuals.

5. But tax avoidance can be done in VAT by transferring the tax burden to another individual by increasing the cost of the product which the consumer buys.

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