VAT is one of the simplest and most obvious forms of taxation, and it's pretty similar all over the world (maybe with small implementation detail differences), so I'm quite surprised to see you struggle with the concept!
I don't struggle with the concept, I just hate having to pay it.
Did my books myself and in the beginning the VAT was only once every quarter. At some point my income and work load grew and the tax office decided I had to do the VAT declaration every month. Sure earned a lot of money, but it also increased the work load, both client and tax work. Reaped the benefits of it too though. Could not have afforded the very expensive oscilloscope I have otherwise. No VAT and tax deductions based on investments.
Also VAT is kind of double taxing but for sure a big income for the government. You hire someone, pay the VAT and the worker. The worker then pays income tax over what you payed him, and VAT for all his non business purchases, etc.
The whole thought behind the VAT on foreign webshops was to equalize the playing field for local sellers, but the only one gaining from it are the governments. They take yet again a piece of the pie.
The boatload of work has more to do with what brucehoult mentioned about the different VAT rates that we have now.