The total proceeds received by the taxing authority for either sales tax or value-added tax is the same if the tax rate is the same.

Question

Quizplus · Accepted Answer

The total proceeds received by the taxing authority for either sales tax or value-added tax is the same if the tax rate is the same because the tax base is the same. The tax base is the total amount of goods and services sold. The tax rate is the percentage of the tax base that is collected as tax. Therefore, the total proceeds received by the taxing authority is the tax base multiplied by the tax rate. Since the tax base and the tax rate are the same for both sales tax and value-added tax, the total proceeds received by the taxing authority will be the same.

The Total Proceeds Received by the Taxing Authority for Either