Why did VAT start?

Value Added Tax (VAT) was introduced to create a more efficient and transparent system of taxation on goods and services. It was designed to eliminate the cascading effect of taxes, where tax was levied on tax, thus reducing the overall tax burden. VAT also aimed to broaden the tax base, increase government revenue, and reduce tax evasion by providing a clear audit trail. The system allows businesses to reclaim the VAT they pay on inputs, ultimately making it a more equitable form of taxation.