If you are in the EU or Canada, there is no way to turn off the VAT on Fees feature after Amazon started charging VAT on Fees in late 2024; if you are in the US, VAT on Fees will not apply as there is no VAT scheme, and so does not show. When setting your VAT scheme, prompts will show where necessary to highlight this:
If you are VAT-exempt, your VAT status should be set to 'Not Registered' to comply with VAT being charged on Amazon fees.
A good visual of what it was like before vs. now can be found in this video where the logic is explained.