A consumption tax levied by the governments on the sale of goods and services is known as sales tax and is imposed at the last point of sale to the ultimate consumer. Sales tax is also a single-rate charge that is imposed on the product when the sales occur as opposed to the VAT where it is charged on each phase of the supply chain. Retailers have the obligation of collecting and remitting the tax to the authorities. Although both the sales tax and VAT serve the purpose of generating revenue to the government, VAT offers more transparency and it does not cascade tax. Such countries as the United States have sales taxes.
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