1. Answer both A and B questions.

1. What is Value Added Tax? How to calculate the VAT to be paid by a retailer to Government when he purchases products from a wholesaler and sells to customers.
2. A retailer buys an article from the wholesaler at OR160 and the wholesaler charges a sales tax at the prescribed rate of 6%. The retailer fixes the price at OR 200 and charges sales tax at the same rate. Apply value added tax system of sales tax calculation to answer the following questions.

1- What is the price that a consumer has to pay to buy the article?

2- Find the input tax and output tax for the retailer.

3- How much VAT does the retailer pay to the government?

4- How much VAT does the wholesaler pay to the government?