How does the consumer benefit with VAT ? Options: A . &nbspReduces the cost of production B . &nbspIt removes tax on tax and thus reduces prise-rise C . &nbspWith the abolition of the sales tax D . &nbspDue to the exemption of small businesses from the tax within certain limits prescribed by the State

How does the consumer benefit with VAT ?

Question

How does the consumer benefit with VAT ?

Options:

A . Reduces the cost of production

B . It removes tax on tax and thus reduces prise-rise

C . With the abolition of the sales tax

D . Due to the exemption of small businesses from the tax within certain limits prescribed by the State

Answer: Option B
Answer: (b)
Value Added Tax (VAT) is a tax applied on the value that is added to goods and services at each stage in the production and distribution chain.
It forms part of the final price the consumer pays for the goods or services. On the domestic market, VAT is collected in stages, by registered manufacturers, wholesalers, retailers and services providers.
It is only individuals and firms registered with the VAT Service who can charge VAT on their supplies. However, the collection of the tax at more than one stage does not lead to duplication of the tax.
VAT is designed to ensure that most forms of consumer spending are taxed evenly and fairly. VAT is not a tax on the seller for it is the buyer who pays the tax. VAT will not be an additional tax, but a replacement for some existing indirect taxes.
It will be a broad-based, comprehensive and simplified system of taxation on transactions. VAT will improve, simplify and modernize the tax system.

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