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Forum – Question & AnswerCategory: UAEWhat is the difference between VAT and Sales Tax?
Keshav Bansal asked 2 years ago
What is the difference between VAT and Sales Tax?
1 Answers
Krizelle Zara answered 2 years ago

Sales tax is also a consumption based tax. The basic difference between VAT and sales tax is that VAT is charged on every stage of value addition including the final sales. However, sales tax is only imposed on the final sale to the consumer. In most of the countries sales tax is imposed only on the sales of goods; however, VAT is imposed on goods and services both.
VAT is imposed on imports also in order to protect the interests of domestic suppliers of the same goods and services. Generally, VAT is preferred over sales tax as it makes the suppliers serve as tax collectors for the government and reduces the misreporting and tax evasion.