Value added tax is tax on value added
July 13, 2019
Article
Assume Item X is purchased at Sh.100 and sold at Sh.120
Input tax = 100@16%= 16
Output Tax = 120@16%= 19.2
VAT payable = 19.2-16= 3.2
Value added in the transaction= 120-100= 20
Tax on the Value added = 20@16%= 3.2
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