A value added tax (VAT) is a type of consumption tax that is imposed on a product whenever value is added to it. a stage of production and at the point of production. retail. The amount of VAT the user pays is the cost of the product, minus the costs of materials used in the product that have already been taxed. VAT came into force in 1973, introduced by Lord Barber, chancellor to Sir Edward Heath, and began as a simple 10 per cent tax on almost all goods purchased from a business. Since then, it has grown in size, complexity and popularity. Say no to plagiarism. Get a tailor-made essay on 'Why violent video games should not be banned'?Get the original essayPaddy Behan, a partner at accounting firm Vantis and considered one of the country's leading VAT specialists, said: " This is an extremely effective tax, It is a formidable tax from a revenue collection exercise. It swept the entire world. More than 130 countries have now adopted it, from Belgium to Burkina Faso. One of the few countries to resist is America, but scholars talk about its introduction there. "VAT was originally a French idea, launched in the 1950s. Britain introduced it as part of its condition of membership of the European Economic Community. All countries joining the EEC had to replace their indirect taxes with VAT It replaced the purchase tax, which was a fairly complex system with many different rates At first, this rate was relatively low, not exceeding 10 percent, with the exception of l. Petrol and – briefly – electrical appliances, which were considered luxury goods before Britain discovered North Sea oil They were subject to a rate of 25 percent. Heath government, when in opposition, always promised that essential teams would not be subject to VAT, like books Value added tax (VAT) is a consumption tax, it is. i.e. a tax on the purchase of a product or service. It is a form of taxation that focuses on the amount of an individual's consumption as opposed to their contribution to the economy (income tax). Value added tax is paid by residents of a country. Consumers and businesses are liable for VAT when purchasing services or products. When a manufacturer creates a product, it is liable for value added tax on the components purchased in order to create goods. The VAT that the consumer pays when placing the product on the market applies to the cost of the product, less the cost of the components already taxed. Residents of the UAE will have to pay a value added tax (VAT) of 5 percent. on food, water, electricity and higher education starting next year, an analyst said. Businesses will be responsible for carefully documenting their business income and costs and associated VAT charges. Registered businesses and traders will charge VAT to all their customers at the current rate and will pay VAT on the goods/services they purchase from suppliers. The difference between these amounts is recovered or paid to the government. Supplies subject to the zero rate are listed in Article 45 of Federal Decree-Law no. (8) of 2017 on value added tax, such as: Exports of goods and services. International transport of goods and passengers. Certain means of transport, such as trains, trams, ships, planes. First sale/rental of residential buildings. Aircraft or vessels intended for rescue and.