value-added tax

value-added tax (VAT), levy imposed on business at all levels of the manufacture and production of a good or service and based on the increase in price, or value, provided by each level. Because the consumer ultimately pays a higher price for the taxed commodity, a VAT is essentially a hidden sales tax. Originally introduced in France (1954), it is now a major part of the tax structure of most Western European nations. In the early 1990s the U.S. government considered instituting a VAT to fund national health care programs.

The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.

More on value-added tax from Fact Monster:

  • sales tax - sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of ...
  • taxation - taxation taxation, system used by governments to obtain money from people and organizations. The ...
  • Encyclopedia: Businesses and Occupations - Encyclopeadia articles concerning Businesses and Occupations.

See more Encyclopedia articles on: Businesses and Occupations