system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What is the difference between VAT and sales tax?
gpt
Sales tax is only collected at the final stage. 

Like when you buy food at the grocery store.
An apple is farmed, then purchased by a wholesaler, then given to a distributor to ship, the purchased by they actual grocery store. And then finally purchased by you. 

 It's not taxed until you buy it. 


A VAT is applied at every step where the product changes hands. So in the above example everyone there would be paying a little tax. 

In short every time *value is added* there is tax. And each step is supposed to be adding value. Wholesaler makes it easier to ship the food. Distributor actual ships the food. Grocer makes it so you can easily get the food.

One of the biggest affects is that with a VAT is that there is a lot more documentation which means it's much less likely for tax revenue to just disappear. 

Like if you have sales tax all you need to do is fiddle with the last step to avoid paying any taxes. With a VAT that is much harder. They also tend to incentivize vertical integration I.e. a single company controlling the entire process so the goods never change hands.