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

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

New art galleries are opening, encouraged by Italy’s recent decision to reduce value-added tax on art sales and imports from 22% to 5%, one of the lowest rates in the European Union.

From The Wall Street Journal • Oct. 4, 2025

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

He slashed income taxes for the highest earners, began refunding some of a value-added tax levied on food purchases, unveiled fresh payments for pensioners and unemployed people, and announced bonuses for millions of workers.

From Seattle Times • Nov. 16, 2023

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