"Larry W4CSC" wrote in message
...
Isn't the idea of VAT that the product is taxed EVERY time it is
increased in value, instead of just a sales tax to the end user? I.e.
the ore is refined...vat...the metal is rolled...vat...the rolled
metal turned into a widget...vat...the widget goes to a
distributor...vat...the distributor jacks up the price and sells it to
a wholesaler...vat...the wholesaler jacks it up and sells it to the
merchant...vat...the merchant sells it to you...vat. Isn't that how
it works at every station where it changes hands from one company to
the next....every time value is added to the product?

VAT is Value Added Tax, a tax over the added value only.
Everyone in the 'chain' pays VAT over the purchase price but gets this
refunded, except the consumer at the end of the chain. So everyone in the
middle of the chain only pas VAT over the *increase* in price.

The net result is the same; whether you only add VAT to the enduser price or
add it incrementally over the increase of the price during each step. The
advantage of the latter is that the government get its share in smaller bits
spread over the proces from 'ore' to 'endproduct' instead of one large sum
at the end.

Meindert