Value Added Tax - Philippine Setting

Value Added Tax or VAT is a privilege tax. It is imposed on:

a. The sale, barter, exchange (including transactions deemed by law as a sale) or lease of goods or properties and rendition of services in the course of trade or business; or
b. The importation of goods, whether used in business or not.

The most important feature of VAT is that it is a regressive system of taxation. It is regressive because more poor people are subjected to the tax. In the Philippines, the Constitution provides that "the Congress shall evolve a progressive system of taxation". The purpose perhaps is to subject the more able taxpayers to tax in order to spare the ones who are unable.

VAT is also an indirect tax. This means that the taxpayer can pass the burden of the tax to the buyer, transferee, or lessee of the goods, properties, or services as part of the purchase price in the absence of any showing that the transferee, etc. is exempt from indirect tax.

Read more here :)
http://penchantpens1.blogspot.com/2014/02/value-added-tax-vat-and-its.html