# Value Added Tax (VAT)

*Taxes — Finicade finance glossary*

VAT is charged at each stage of production on the value added, with businesses reclaiming the VAT they paid so only final consumption is taxed. That self-policing chain of invoices makes it far harder to evade than a single-stage sales tax, which is why over 170 countries use it and the US does not. It's regressive on income, which is why most systems zero-rate food and children's clothing.

**Also known as:** VAT, GST, goods and services tax

**Related terms:** [Sales Tax](https://finicade.com/glossary/sales-tax), [Regressive Tax](https://finicade.com/glossary/regressive-tax), [Excise Tax](https://finicade.com/glossary/excise-tax), [Inflation](https://finicade.com/glossary/inflation), [Corporate Tax Rate](https://finicade.com/glossary/corporate-tax-rate)

Source: https://finicade.com/glossary/value-added-tax