What is the operational distinction between a VAT and a retail sales tax?
Farmer grows wheat and sells it to a miller (VAT taxed) the miller grinds the wheat and sells it to a baker (VAT taxed) the baker makes bread and sells it to a supermarket (VAT Taxed) and the market sells it to you (VAT taxed). Hope you enjoy the $11 loaf of bread.
With a retail sales tax, the taxing begins and ends when the market sells a loaf to the consumer. Hope you enjoy your $3 loaf of bread.
The retail sales tax is collected only at the very end of a long chain. Manufacturers sell parts to assembly houses, assembly houses sell products to retailers, all tax-free. The tax is collected - and sent to the government - only when retailers sell to the customer. Sometimes - like when selling spare parts - that chain can be measured in years because stocked parts in a warehouse are not yet taxed.
The VAT shortens that chain by collecting a portion of the tax as soon as the taxable work is performed. In other words, sales to intermediaries are taxed. This makes it harder for small businesses to stock the shelves because each item costs more. Also everyone has to go through a complex accounting procedure and apply VAT to whatever they sell. If a VAT law is complex enough (as they invariably become) it is a serious challenge to classify your products (and your business customer) and apply the right amount of tax. Today in the USA as long as my business customer has a proper certificate I just sell to him tax-free.
The VAT also helps in taxation by reducing the chances of a product to slip through untaxed. Even if some bodega owner forgets to ring a cash purchase, that bottle of sugar water came into his hands already VAT taxed, so the government loses not 100% of the sales tax but maybe 10%.
In other words, VAT does not help anyone but the government. If only they could, they'd post a tax man behind every worker, so that the worker would be taxed for every minute, and the business would be taxed, and the product would be taxed... The VAT is close to that, with the only difference that you, the business, hire and pay that tax man, and you are responsible for accuracy of his calculations.