The E-VAT we are considering is a so-called destination based, gross product VAT.
Destination-based means that imports are taxed as they enter the country. Exports are not taxed. This both encourages domestic production and allows the E-VAT, through huge amounts of U.S. imports, to influence foreign behavior.
A Gross Product VAT is the largest tax base available, and is measured by final sales to domestic purchasers. It is equal to the GDP minus exports of goods and services, plus imports of goods and services. Using final sales to domestic purchasers gives the E-VAT the largest tax base in order to do its job most effectively at the lowest average rate. In 2005, final sales to domestic purchasers were $13.194 trillion.