Consumption tax and value-added tax (VAT) are two important taxes in our daily life, but they have distinct differences. 🛒 The consumption tax is levied on specific high-end goods or services like luxury items, tobacco, alcohol, and fuel. It targets products that may harm public health or the environment. For example, if you buy an expensive watch or a pack of cigarettes, you’ll pay this tax. 💸

On the other hand, VAT applies to almost all goods and services during the production and distribution process. Businesses charge VAT when selling their products or services, and then they can deduct the VAT they’ve paid on purchases. This system ensures that the tax burden is shared across the supply chain. 📈

In short, consumption tax focuses on specific luxury or harmful goods, while VAT is more universal, covering most economic activities. Both aim to regulate the market and generate revenue for the government. 😎