Example-VAT with Many Taxes

XYZ Company  produced alcohol, cigarettes/cigars and other products in Cambodia. During October 2020, Company produced and sold the following products:

• -Beers of $22,000 ( excluded any taxes)
• -Wines of $11,000 ( excluded any taxes)
• -Cigarettes/cigars of $1,100 ( excluded any taxes)
• -Drinking water of $2,200 ( excluded any taxes)
• -Gazed soft drink of $3,300 ( excluded any taxes)
• – Other goods of $5,000 ( excluded any taxes)

Required:

1. Calculate specific tax
2. Calculate Public lighting tax (PLT)
3. Calculate VAT
4. Calculate total selling price

Answer 

Wine, beers, Cigarettes/cigars are subject to Public lighting tax (PLT), and they are subject to specific tax too .

1.Calculate Specific Tax ( read more Specific tax @ http://www.cambodiataxation.com/courses/specific-tax/)

• Specific Tax for Beers =$22,000 x 90% x 30%=$5,940
• Specific Tax for Wines=$11,000 x 90% x 35%=$3,465
• Specific tax for Cigarettes/cigars=$1,100 x 90% x 20%=$198

2. Public lighting tax (PLT) ( read more PLT @ http://www.cambodiataxation.com/courses/public-lighting-tax/)

• Tax base =( amount excluded taxes + specific tax ) x 100% =(22000+11000+1100+5,940+3,465+198) x 100%= $43,703
• Tax rate = 3%
• Public lighting tax (PLT)= Tax Base x 3% =$43,703  x 3%=$1,311

3. VAT 

Tax base = amount exclude taxes + any taxes except VAT=(22000 + 11000 + 1100 + 2200 + 3300 +5000)+(5940+3465+198+1311)=$55,514

Tax rate = 10%

VAT = Tax base x 10% =$55,514 x 10% =$5,551.4

4. Total selling price

Total Selling price = amount excluded taxes + any taxes = 55,514 + 5,551.4 = $ 61, 065.4