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effective v/s statuatory rate?

This topic has 2 replies, 2 voices, and was last updated 1 year ago by Stephen Widberg.

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April 9, 2021 at 2:49 pm #616575
Noah098
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sir what are some of the reasons why effective rate is different from statutory rate?
deferred tax? under or over provisions? are these some of the likely reasons?
April 9, 2021 at 2:51 pm #616576
Noah098
Member
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basically we will be answering this question in the same way as we’ll be answering a question asking why taxable profits are different from accounting profits.
so both of them will have similar reasoning, isnt it ?
April 10, 2021 at 1:32 pm #616657
Stephen Widberg
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UK example:
PBT 100
Add back fine disallowed for tax 20
Taxable profit 120
Tax @19% = 22.8
Effective rate = 22.8 / 100 x 100 = 22.8%
So, yes, because of permanent and temporary differences
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