To clarify - I mean it can be considered regressive for consumers rather than businesses. A higher proportion of income of the poor gets spent on VAT than the r

To clarify - I mean it can be considered regressive for consumers rather than businesses. A higher proportion of income of the poor gets spent on VAT than the rich. > Depends on how you structure the VAT. I don't understand all the different possible implementations, but my understanding is that this is done by design so that value-added-production is what is actually being taxed. Most businesses are VAT exempt (or can reclaim the VAT) to avoid multiple levels of VAT being charged (at least this is how it works in the UK/EU), so it often effectively is only really applied at the final sale. As an example, if I own a company that mines coal in the UK and then sells it to a steel smelting company, both the coal mining company and the steel smelting company would be VAT registered and not pay VAT for these transactions. > This is true for all taxes. The end consumer is always the one that ends up paying all of the tax, because any tax in the supply chain will always get passed along through higher prices. This is not true for all taxes - for instance a tax on corporate profit does not get passed along in the same way as a blanket X% on all sales.