VAT -Value Added Tax is an indirect tax, sometimes you might also see it discussed to as a type of ordinary feasting tax. VAT applies on most supplies of things and services that are bought & sold. VAT is one of the kinds of tax found everywhere the world. In European countries, cooperations have to pay the tax to the administration that collects from the customers. The net result is that tax revenues to government reflect the ‘value add’ through the supply chain.