Reference no: EM132938630

Questions -

Q1. A firm A purchases goods and services for $80,500 including VAT. It also bought a machine for $8,000 excluding VAT. The firm sells $150,000 of goods excluding VAT. All VAT is at 8.5% and is recoverable. Find:

a) The Output VAT?

b) The Input VAT?

c) The Balance on the VAT account?

Q2. Firm Y purchased raw materials for $3,500 from Firm X and used them to manufacture goods, which were sold to Firm Z for $10,500. All Firms are VAT registered. Prices stated are inclusive of VAT at 15.5%. What is the VAT check to be sent by each party to the Government?

Q3. A business subject to 15% VAT, purchased goods for $150,000 to be transformed and sold for $250,000. It paid $25,000 VAT on purchase of goods. What is the input VAT?. What is the VAT due or payable using the tax credit method?

Q4. Draw the supply and demand curves for used cars in a competitive market. If the Government levies a tax on used cars,

a) Show (by words and graph) what happens to the price paid by used cars' buyers, the price received by sellers, and the number of used cars in the market.

b) Show via the graph, the Tax Revenue area and the Deadweight Loss area.

c) What happens to the shares to the Tax Revenue of both buyers and sellers of used cars, if the Price Elasticity of Demand is higher than the Price Elasticity of Supply?

Q5. If the value of price elasticity of demand for milk is the same as its price elasticity of supply, we would expect that the tax burden to be:

(i) Borne mostly by buyers

(ii) Borne mostly by sellers

(iii) Borne equally by sellers end buyers.

Q6. Using the Published Annual Reports of the Taxation Department in Morocco

a) Construct the database for the 2015-2020 time period regarding: Total tax revenue (in net terms), Corporate Tax (IS), Income Tax (IR), VAT (TVA) and Documentary Tax.

b) Calculate each tax component share in the total tax revenue. Illustrate this by providing pie chart.

c) Draw the components' curves and show the trend of each component.

d) Provide your own analysis and comments of all your findings.