What does zero rating mean? Here are some of the key taxation terms that relate to the budgeting plans -- explained:
When a commodity is zero rated, the government doesn’t tax its sale. The manufacturers are allowed to claim credits for the value-added tax (VAT) paid on inputs.
If a good or business is “exempt,” the government doesn’t tax the sale of the good, but producers cannot claim a credit for the VAT they pay on inputs to produce it.
Exempting breaks the VAT’s chain of credits on input purchases hence raises prices and revenues.
Value-added Tax (VAT)
This is the 16 per cent taxed on goods at the point of purchase, usually borne by the consumer.
Taxes levied on the income you earn from employment or business
These are taxes aimed at reducing the compliance burden for small businesses
All items or activities subject to a tax.
the amount of tax borne by an individual or a business depending on income and the rate applied.