What Is a Value-Added Tax (VAT)

Multiple Choice

What is a value-added tax (VAT) ?

A) It is essentially a tax on profits earned by firms from the sale of goods and services.
B) It is a tax placed on a product whenever value is added at a stage of production and at final sale.
C) It is a tax imposed on those who supply factors of production, such as the payroll tax.
D) It is a tax imposed on luxury goods to generate additional revenue for the government.