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KembaraXtra – Legal Terms – Input Tax
Input tax is the value-added tax (VAT) paid by a business on goods and services acquired for business purposes. It is recoverable by registered traders by offsetting it against the VAT they charge customers, known as output tax.
This mechanism ensures that VAT ultimately falls on the final consumer rather than on businesses in the supply chain. Proper accounting for input tax is essential for compliance with VAT legislation.
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