SHALA Merchandising Enterprise is category " B " tax payer but not a body The enterprise reported Br 300,000 sales receive : Br 200,000 cost of goods sold and Birr 62,000 operating expenses during the tax year Ending sene 30 , 2007 Required : Determine the TBP and BPT to be paid
To determine the Total Business Profit (TBP) and Business Profit Tax (BPT) to be paid by SHALA Merchandising Enterprise, we need to calculate the taxable income first.
Taxable income = Sales - Cost of Goods Sold - Operating Expenses
= Br 300,000 - Br 200,000 - Br 62,000
= Br 38,000
As SHALA Merchandising Enterprise is a Category "B" taxpayer, the tax rate for BPT is 30% on the taxable income.
BPT = Taxable income * Tax rate
= Br 38,000 * 30%
= Br 11,400
Therefore, the TBP to be paid by SHALA Merchandising Enterprise is Br 38,000 and the BPT to be paid is Br 11,400.
To determine the tax payable for SHALA Merchandising Enterprise, we need to calculate the Business Turnover Tax (BTT) and the Business Profit Tax (BPT) separately.
1. Calculate the Business Turnover Tax (BTT):
BTT is calculated based on the sales revenue of the enterprise.
Tax rate for Category B taxpayers is 2%.
BTT = Sales Revenue x BTT Rate
BTT = Br 300,000 x 0.02
BTT = Br 6,000
The Business Turnover Tax payable is Br 6,000.
2. Calculate the Business Profit Tax (BPT):
BPT is calculated based on the net profit of the enterprise.
Net Profit = Sales Revenue - Cost of Goods Sold - Operating Expenses
Net Profit = Br 300,000 - Br 200,000 - Br 62,000
Net Profit = Br 38,000
Tax rate for Category B taxpayers is 30%.
BPT = Net Profit x BPT Rate
BPT = Br 38,000 x 0.30
BPT = Br 11,400
The Business Profit Tax payable is Br 11,400.
Therefore, the total tax payable for SHALA Merchandising Enterprise is Br 6,000 (BTT) + Br 11,400 (BPT) = Br 17,400.