Value Added Tax (VAT) is a taxation system devised by governments to collect national income on consumer products, either goods or services. It is an indirect tax levied upon consumers who purchases basic commodities. In essence, the more you purchase goods and services the more you will pay for the VAT. The rate of which the VAT is set depends country by country or state by state. To calculate
. for the VAT, you have to add up all the taxable gross amount then multiply it by the VAT Rate. For example, if the rate is 12.5% then you have to multiple by 0.125 the taxable gross amount. The result would be the amount you will be paying as VAT. Deduct the VAT from the gross amount to determine the amount you will be paying for the actual consumer product.
