value-added tax

American  

noun

1. an excise tax based on the value added to a product at each stage of production or distribution: value added is arrived at by subtracting from the total value of the product at the end of each production or distibution stage the value of the goods bought at its inception. VAT

---

value-added tax British  

noun

1. (in Britain) the full name for VAT

---

value-added tax Cultural  

1. A tax on the value added to a product at each stage of its production, from raw materials to finished product. Widely employed in Europe, value-added taxes have the advantage (for governments) of raising revenue “invisibly,” that is, without appearing as taxes on the bill paid by the consumer.

---

Etymology

Origin of value-added tax

First recorded in 1930–35

Example Sentences

Consumers must now pay a 13 percent value-added tax for contraception including condoms, after Beijing removed exemptions on the products from January 1.

From Barron's • Jan. 5, 2026

Retail investors are no longer able to offset value-added tax when selling gold bought from the Shanghai Gold Exchange, the analysts add.

From The Wall Street Journal • Nov. 2, 2025

India has driven more of the economy into the formal sector, for instance by enacting a goods and services tax like Europe’s value-added tax, allowing more revenue to be extracted from more people and businesses.

From Seattle Times • Apr. 7, 2024

In 1982, he sought to raise government income by imposing a value-added tax on children’s shoes.

From New York Times • Feb. 9, 2024

Fiscal   reforms, including the introduction of a value-added tax and reform   of the customs service, have improved the government's revenue   collection abilities.

From The 2008 CIA World Factbook by United States. Central Intelligence Agency