What does the value-added tax on vehicles mean?

[Briana]

When purchasing a car, you need to pay value-added tax and purchase tax. The so-called value-added tax is a turnover tax levied on the added value of goods (including taxable services) generated during the circulation process. From the perspective of taxation principles, value-added tax is a turnover tax imposed on the value-added or incremental value of goods in circulation, production, labor services and other links. It implements an excise tax, which means it is borne by consumers and only levied when there is added value. The collection of value-added tax usually covers all links in the production, circulation or consumption process. The purchase tax payers are units and individuals who purchase taxable vehicles. It is a value-added tax paid due to the generation of incremental value during the sales process, which is exactly the same as individual commodities. The core purpose of purchase tax is to fund national road traffic construction.