What is the difference between a valueadded tax and a sales tax?

What is the difference between a value-added tax and a sales tax Introduction: The Role of Taxes in Economic Systems Hello, everyone! Taxes play a crucial role in any economic system, serving as a primary source of revenue for governments. Today, we'll explore two common types of taxes: value-added tax (VAT) and sales tax. While they may seem similar at first, there are significant distinctions between them. Let's dive in! Understanding Sales Tax: A Basic Overview Sales tax is a consumption tax imposed on the final sale of goods and services. It is typically a percentage of the retail price and is collected by the seller at the point of purchase. The tax amount is then remitted to the government. In many countries, sales tax rates can vary based on the type of product or service. For instance, essential goods like groceries may have lower tax rates or even be exempt in some cases. The Mechanism of Value-Added Tax (VAT)