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Economics vocabulary · Fiscal Policy and Public Finance

VAT

Meaning in economics, with examples

/ˌviː eɪ ˈtiː/abbreviationCore term

In economics, VAT means: Short for value-added tax: a tax on spending that is added to the price of most goods and services at each stage of production and is finally paid by the consumer.

In Turkish: KDV, katma değer vergisi

How it is used

The main indirect tax in Turkey, the EU, the UK and most other countries; the US uses sales taxes instead. Prices include or exclude VAT, and some goods are VAT-exempt or zero-rated. It is said as V-A-T or as one word, vat.

Example sentences

  1. All prices on the menu include VAT.

  2. A cut in VAT on food would lower inflation for a few months.

Common collocations

  • VAT rate
  • including VAT
  • excluding VAT
  • VAT-exempt
  • raise VAT
  • taxationThe system by which a government collects money from people and businesses through taxes on income, profits, spending and property.
  • tax revenueThe money a government collects from taxes on income, profits, sales, property and other things during a given period.
  • income taxA tax that people pay on the money they earn from work, savings, rent and other sources, usually taken directly from wages.
  • consumer price indexA measure of the average change over time in the prices that households pay for a fixed basket of goods and services, used to calculate inflation.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Fiscal Policy and Public Finance

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This page explains English vocabulary for learners. It is not financial advice.