A value-added tax is a multi-stage, noncumulative tax on consumption.

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A value-added tax (VAT) is a tax assessed on the increased value of a product or service at each stage of production or distribution, from raw materials to the final product. It is a noncumulative tax as it is only assessed at each stage of production or distribution, rather than being added to the entire value of the product or service. It is also a tax on consumption as it is ultimately paid by the end consumer.

A Value-Added Tax Is a Multi-Stage, Noncumulative Tax on Consumption