Is Tariff the same as VAT?

[Starmix]

They sound similar, but tariffs and VAT are different things. A tariff is imposed by a government on goods imported from other countries. The government is generating tariffs to protect domestic industries from foreign competition, generate government revenue, or influence trade relations. The tariff is usually calculated as a percentage of the value of the imported goods. A tariff on imported cars might be 10% of the car's value, paid by the importer.

Regarding VAT, who imposes it? It is the government on goods and services produced and consumed within the country imposes Value Added Tax. The purpose is to raise revenue for the government and provide a broader tax base. The VAT is usually calculated as a percentage of the value added at each stage of production and distribution. For example, a VAT might be added to the price of a shirt at each step, when the fabric is produced, when the shirt is sewn, and when it's sold in the store.

Tariffs apply only to imported goods m while VAT applies to goods and services produced within a country. Tariffs are primarily designed to protect domestic industries or influence trade, while VAT is a general revenue–raising measure. While both tariffs and VAT are taxes, they differ in who imposes them, their purpose, and the scope.

 

[Suba]

In general, tariffs are one form of tax imposed by a government/country on export goods or import duties, and can also be applied as economic sanctions against other countries. While VAT is a type of tax imposed on consumers when a purchase transaction occurs for services and goods, but if we eat at a Japanese restaurant, VAT is not imposed but will be imposed on local taxes.

 

[Starmix]

Indeed, these two terms function differently. While tariff is imposed for payment of foreign products, VAT is exclusively inherent within the country imposed by tax laws. Both tariff and value added tax will be paid to the Bureau of Internal Revenue.