Yea, the idea is that the VAT effectively taxes the added value in each step of the value chain because there's a limit to how much you can charge for an item or service. E. g. a 25 % VAT does not necessarily mean the goods become 25 % more expensive; most of those 25 % would have been profit for the reseller, intermediates and manufacturer if it were not for the VAT. Perhaps a little contra-intuitively, a high VAT keeps prices down and business efficient because every intemediate is indirectly taxed even though the VAT is only charged to the final consumer.