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1:51
financestrategists.com
Value-Added Tax (VAT) | Definition, How It Works, and Purpose
A value-add tax is a tax charged on the gross profit of every step in the supply chain. It’s best understood using an example: The country of Decivat has a 10% value-added tax. A flour manufacturer will buy $1,000 worth of grain from a farmer for $1,100, $100 of which will go to the government as VAT, to create flour. If the manufacturer ...
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