Which of the following is true about output VAT?

Output VAT refers to the value-added tax that businesses charge on their sales of goods and services. It is an important aspect of the VAT system, as businesses are responsible for collecting this tax from their customers when a taxable sale occurs. This collection is done by applying the relevant VAT rate to the sale price of goods or services provided, thereby enabling the government to collect tax revenue from consumer spending.

The correctness of this statement lies in its reflection of the fundamental role that businesses play in the VAT system. Businesses add output VAT to their selling prices and subsequently remit that amount to the tax authorities. This ensures that the tax is integrated into consumer pricing, maintaining a seamless flow of taxation based on consumption.

In contrast, other statements do not accurately capture the nature of output VAT. It is applicable to both goods and services rather than being limited to physical goods. While consumers ultimately pay the VAT included in purchase prices, the tax is collected by businesses and not paid directly to the government by consumers themselves. Additionally, the frequency of VAT payment to the government is contingent on a business's turnover and can vary; businesses may be required to submit VAT returns monthly, quarterly, or annually depending on their size and specific regulations, rather than on a strict monthly basis regardless of turnover