Taxes

Published on May 2017 | Categories: Documents | Downloads: 37 | Comments: 0 | Views: 520
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Taxes

Tax is a compulsory contribution to state revenue, imposed by the
government to worker’s income and business profits or added to the cost of
products.
VAT/ EVAT is a form of sales tax charge for every products we buy. To
calculate the tax, multiply the tax rate by the original price.

Example:
As written in the constitution, every product is entitled for 12% tax. If the
original price of Sony Xperia SP is Php 13,450, how much is the tax and its selling
price?

Solution:
Tax rate = 12% = 0.12
Original price = Php 13,450

Step 1. Change the tax rate to a decimal by dropping the percent sign and moving
the decimal point two places to the left. The tax rate is 12% = 0.12

Step 2. To find the tax, multiply the original price by the decimal from step 1.
The tax is Php 13,450 x 0.12 = Php 1,614

Step 3. To find the selling price, add the tax from the original price. The
selling price is Php 13,450 - Php 1,614 = Php 15,064.

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