Value-added Tax (Noun)
Meaning
A tax levied on the difference between a commodity's price before taxes and its cost of production.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company had to pay value-added tax on the profit made by selling the product at a higher price than its cost of production.
- Value-added tax is a consumption tax that is levied on the value added to goods and services at each stage of production and distribution.
- The government introduced a value-added tax to increase revenue and reduce the burden of other taxes on businesses and individuals.
- The value-added tax rate varied depending on the type of product, with essential goods attracting a lower rate and luxury goods a higher rate.
- To calculate the value-added tax, the business had to subtract the cost of production from the sale price of the product and then apply the tax rate to the difference.