The tax levied on goods and services at each stage of production is

The tax levied on goods and services at each stage of production is called Value Added Tax (VAT). This is a tax that is added to the price of a product or service at every stage of production or distribution, and is ultimately passed on to the final consumer. For example, when a manufacturer buys raw materials, they pay VAT on those materials. Then, when they sell their finished product to a wholesaler, they charge VAT on that sale. The wholesaler then charges VAT when they sell to a retailer, who in turn charges VAT when they sell to the end consumer. At each stage, the VAT paid on previous purchases is subtracted from the VAT charged on the sale, so that the tax is only paid on the value added at that stage. VAT is a type of ad valorem tax, which means that it is based on the value of the product or service being taxed. This is in contrast to a surtax, which is an additional tax added on top of an existing tax, or PAYE (Pay As You Earn), which is a system for collecting income tax from employees' salaries as they are paid.