Different Types of Everyday Taxes
Identify VAT as a tax added to the price of goods and services — collected by businesses on behalf of the government and paid by the customer as part of the purchase.
In this lesson
Different Types of Everyday Taxes is part of Why Communities Collect Taxes. This preview shows how taxes-intro connects to everyday family decisions such as earning, saving, spending choices, goals, approvals, or parent-guided money conversations inside Progress Penguin.
Think about this money choice
Sade buys a biscuit and sees a small line on the receipt for VAT.
How it works
Value Added Tax — VAT — is a tax added to the price of most goods and services at the point of sale. The customer pays it as part of the purchase price, and the business collects it on behalf of the government. It is called 'value added' because it is applied at each stage of production and sale. The name and rate of this tax vary by country — it may be called VAT, GST or sales tax, and the rate shown here is an example.
Try a real-life example
Real-life money moment: Sade buys a biscuit for 230 in local currency. The receipt shows: item price 200 in local currency, VAT 30 in local currency. The shop collected the 30 in local currency on behalf of the government. Sade paid it as part of the total — she did not hand it over separately, but it is in the price.
Activity preview
Move the money slider
Use what you learned to complete this short challenge.
Practice funding your spending account
Open Requests and make a deposit request so you can see how money gets added before spending. Parent approval can happen later.
Quiz preview
Different Types of Everyday Taxes include:
You buy a 1000 in local currency item and the receipt shows 75 in local currency VAT. This is: