Rapid is a contractor. She entered into a contract on March 1, 2019 which was completed on March 31, 2019. She received the total value of the contract amounting to P550,000 on March 31, 2019. Rapid spent for the materials used in the contract which she acquired from value- added registered suppliers costing P150,000. All amounts are exclusive of VAT. The value- added tax payable by Rapid for the month of March is _.

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A:

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.