What is the essential difference between an income tax and a VAT?

Question

Quizplus · Accepted Answer

The essential difference between an income tax and a VAT (value-added tax) is that income tax is a direct tax, which is calculated on the income earned by individuals and businesses, whereas VAT is an indirect tax, which is levied on the value added at each stage of production and distribution of goods and services. In other words, income tax is paid directly by the individual or business earning the income, whereas VAT is paid by the consumer indirectly through the purchase of goods and services.

What Is the Essential Difference Between an Income Tax and a VAT