To summarize, is it right to understand it this way: I am a widget maker. I sell $100 of widgets to my friends domestically. I sell $100 widgets to foreigners

To summarize, is it right to understand it this way: I am a widget maker. I sell $100 of widgets to my friends domestically. I sell $100 widgets to foreigners over the internet. I use $50 of local materials and services, e.g. wood and labor (in the form of wages I pay my staff). I use $50 of foreign materials in the form of some rare earth metal stolen from a Central African country. And the tax rate is 20%. Thus, in the current system I would have $200 in total revenue. $100 in the expenses (both domestic and foreign imports) I deduct. Leaving me with $100 profit on which I pay $20 to the government as tax. In the proposed system I have $200 in revenue. I pay no tax on the $100 I exported. I pay 20% on the $50 domestic profit (so $10). And 20% on the $50 of imports (so $10). Total to government is $20. (Side thought: Apple could bring all its cash back immediately in this scheme tax free by buying a $50 billion widget from Apple HQ.) EDIT: Actually the comparison to VAT (GST as we called it in NZ/Aus) makes it confusing, the way that works in those countries (where I'm familiar with it) it would seem to imply the proposal is more like: I have $100 in foreign revenue on which no VAT is collected. I have $100 in domestic revenue on which I charge 20% VAT (i.e. the people buying domestically are paying me $120, I'm collecting that $20 for the government). That $50 of imports has 20% VAT added to it, so it cost me $60. That $50 of domestic expenses had 20% VAT added to it by those suppliers, i.e. also costing me $60. I've collected $20 in VAT from people buying my goods and services domestically, and I've paid $20 in VAT to my suppliers, so come the end of the year I pay nothing to the government. The governments revenue of $20 from this whole chain comes from the end users of products to the primary producers of the original goods and services (in this case my suppliers would be paying $20 to the government on behalf of my customers). How does this differ from a VAT?