Value Added Tax (VAT) Exemption

Value Added Tax (VAT) exemption means that certain goods or services are not subject to VAT, a tax added at each stage of production and sale. When a product or service is VAT-exempt, businesses do not charge VAT to customers and cannot reclaim VAT paid on their inputs. This often applies to essential goods, healthcare, education, or specific sectors to make them more affordable and accessible. VAT exemption helps targeted industries or products remain competitively priced by removing the additional tax burden, benefiting consumers and supporting policy objectives without compromising overall tax revenues.