USE THE FOLLOWING INFORMATION TO ANSWER THE FOLLOWING QUESTION.
Assume that the production chain for an economy is characterized by the following transactions:

-How much more revenue does a 10 percent VAT collect as compared to a 5 percent RST?

Question

USE THE FOLLOWING INFORMATION TO ANSWER THE FOLLOWING QUESTION. 
Assume that the production chain for an economy is characterized by the following transactions:

-How much more revenue does a 10 percent VAT collect as compared to a 5 percent RST?

Quizplus · Accepted Answer

A Value-Added Tax (VAT) and a Retail Sales Tax (RST) at the same rate would collect the same amount of revenue because they are both consumption taxes but are collected at different points in the supply chain. A VAT is collected at each stage of production based on the value added at that stage, while an RST is collected only at the point of sale to the final consumer. The difference in rates provided in the question is irrelevant to the comparison since the question asks about the difference in revenue collection mechanisms, not the rates themselves.