Cost of Goods Sold =
E-VAT Paid to Buy goods sold (ave.18%) =
Sales =
E-VAT collected on Sales (ave.18%) =
E-VAT Paid by Retailer to Government =
E-VAT =
$1,000,000
$ 180,000
$2,000,000
$360,000
$360,000-$180,000
$180,000 (or 18% of value added)
Thus, in this example, a retailer purchased products for $ 1,000,000 and paid an average 18% E-VAT, or $180,000.The retailer then sold the products for $2,000,000, and collected an average 18% E-VAT, or $360,000. The retailer would get credit for $180,000 already paid on their supply invoices. Therefore the retailer would owe the government $180,000 for the $1,000,000 value added in the sale.
The final purchaser paid the retailer 18% of the total purchase price. For consumers, the E-VAT is the same as any other sales tax. If a watch cost the seller $100 and retailed for $200, the purchaser wold pay a $36 E-VAT or 18% of the total. The retailer in this case would get credit for the $18 paid to the manufacturer when the retailer purchased the watch.