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

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value-added tax British  

noun

1. (in Britain) the full name for VAT

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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.

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Etymology

Origin of value-added tax

First recorded in 1930–35

Example Sentences

Economists say raising taxes on households would help cool inflation, as would lowering the value added tax rate on home energy consumption.

From The Wall Street Journal • Nov. 21, 2025

Tourists can no longer reclaim the 20% value added tax on purchases they make on Oxford Street or at Harrods.

From Los Angeles Times • Mar. 6, 2025

The Federal Inland Revenue Service is accusing the cryptocurrency platform of non-payment of value added tax, company income tax, failure to file tax returns and complicity in aiding customers to evade taxes through its platform.

From BBC • Mar. 25, 2024

The law has raised the price of fuel to its highest level as the government implements a doubling of value added tax on petroleum products to 16%.

From Seattle Times • Jul. 19, 2023

The government said it will cut value added tax on essential foods such as bread, cheese, milk, fruit and vegetables and cereals to 0% from 4%.

From Reuters • Dec. 27, 2022