Characteristics of the Tax
| A General Consumption Tax | → | Value Added Tax is imposed on all imported and locally produced goods and services, subject to certain exemptions. |
|---|---|---|
| An Indirect Tax | → | The tax is ultimately borne by the final consumer. |
| Imposed at Every Stage of Production and Distribution | → | It does not have a cumulative effect, as every taxable person is entitled to deduct the tax paid on their purchases. |
| A Self-Monitoring Mechanism That Enhances Tax Administration | → | The self-monitoring mechanism provided by Value Added Tax helps improve income tax collection. VAT is a tax on consumption rather than on unspent income or savings. |