Question

What is VAT ? Discuss the objectives of VAT?

Answer 1

VAT has been basically defined as a kind of consumption tax where a purchased good or service has been added with a tax. The VAT amount is the “cost of the product”, which is lesser than the total amount of the materials used to produce a product

The purpose of VAT is to raise revenue to finance government spending like any other tax.

Answer 2

A large container for storing and mixing liquids, especially used in industrial processes is called VAT.

The purpose of VAT is to raise revenue to finance government spending like any other tax. VAT is a consumption tax, raising revenue from consumers spending. It is considered that a good tax system should have a balance between income tax and consumption taxes.