Yes, obviously if the same price was shown everywhere but some payments were having VAT removed it would be problematic and it would definitely affect sellers earnings.
I was suggesting dynamic price display, so a $10 game would show up as $10 for you, but since I'm in the UK where we have 20% VAT it would show up as $12 (inc. VAT) when I view the game's page. This would mean the developer gets the same amount regardless, similar to how it is now and the only real difference is that the added VAT is shown earlier in the process rather than waiting until checkout.
It might make the shopping experience a bit smoother for those of us where tax is not added on when you come to pay. I got over it but it was definitely a weird feeling!