To calculate a tax, you need to know:
I. the tax base
II. the taxing agency
III. the tax rate
IV. the purpose of the tax
A) Only I is correct.
B) Only IV is correct.
C) Only III is correct.
D) Items I through IV are correct.
E) I and III are correct.

Question

Quizplus · Accepted Answer

To calculate a tax, you need to know the tax base (I) which is the value on which the tax is calculated, and the tax rate (III) which is the percentage of the tax base that you have to pay to the taxing agency (II). The purpose of the tax (IV) is not necessary to know for the calculation, but it is important to understand the reason for the tax being levied. Therefore, option (E) is the best choice as it includes the correct answers, i.e., I and III.

To Calculate a Tax, You Need to Know