value-added tax

noun
an excise tax based on the value added to a product at each stage of production or distribution: value added is arrived at by subtracting from the total value of the product at the end of each production or distibution stage the value of the goods bought at its inception. Abbreviation: VAT
Also called added-value tax.


Origin:
1930–35

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Collins
World English Dictionary
value-added tax
 
n
(in Britain) the full name for VAT

Collins English Dictionary - Complete & Unabridged 10th Edition
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American Heritage
Cultural Dictionary
value-added tax (VAT)

A tax on the value added to a product at each stage of its production, from raw materials to finished product. Widely employed in Europe, value-added taxes have the advantage (for governments) of raising revenue “invisibly,” that is, without appearing as taxes on the bill paid by the consumer.

The American Heritage® New Dictionary of Cultural Literacy, Third Edition
Copyright © 2005 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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Example sentences
Despite the fillip from the temporary reduction in value-added tax, consumer
  spending will fall sharply.
Its successor has slashed the budget deficit, partly by increasing value-added
  tax by three points.
It also cut social-security contributions, partly making up the shortfall with
  higher value-added tax.
One other option would be a national value-added tax on goods.
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