What does zero rating mean? Here are some of the key taxation terms that relate to the budgeting plans -- explained:

Zero rating
When a commodity is zero rated, the government doesn’t tax its sale. The manufacturers are allowed to claim credits for the value-added tax (VAT) paid on inputs.

Tax exemption

If a good or business is “exempt,” the government doesn’t tax the sale of the good, but producers cannot claim a credit for the VAT they pay on inputs to produce it.

Exempting breaks the VAT’s chain of credits on input purchases hence raises prices and revenues.

Value-added Tax (VAT)

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