The government has put a new 15% tax on 20” ultra-high performance (UHP) tires this month. This follows a 4% sales tax in May, a €15 recycling charge in April and a 10% carbon tax in March.
If the UHP tires now cost €160, approximately how much did they cost before the carbon-tax increase in March?
Answer: Tough, it seems, to be a tire dealer these days. But our top experts here can, at least, help with the maths. For working out the correct answer as €108 (€112 also accepted, see Solutions below), it’s very well done to: John Bowen, rubber industry consultant, Bromsgrove, Worcs, UK; Michael Easton, director, Globus Group, Trafford Park, Manchester, UK; Michele Girardi, Scame Mastaf Spa, Suisio, Italy; Flemming Vorbeck, Nordic purchasing manager commercial, NDI Group A/S, Brørup, Denmark; Stephan Paischer, head of product management special products, Semperit AG Holding, Vienna, Austria; Rohit Kalé, distribution strategy manager, AMN/V/B2C/DIS, Michelin North America Inc.; France Veillette: chef environnement, Usine de Joliette, Bridgestone Canada Inc., Canada; Sergey Krasnozhon, team leader, SIBUR International GmbH, Vienna, Austria; Michael Kazas, sales development manager, Bridgestone/Bandag Tyre Solutions, Greece; Jose Padron, material development specialist, Waterville TG Inc. Waterville, Québec, Canada; and everyone else who had a go.
Let X = original price in Euros; then this reduces to a single equation:
[[1.10X +15]1.04]1.15 = 160
Solving for X: X = 107.98 or €108
There are two possible answers, based on whether there would be tax on tax or not?
If there is simple tax on tax, then the price in Marc before Carbon tax will be €108. And if we have to avoid the tax on tax, then it would be €112.
This is considering that the applicable tax base is the sales price of the relevant month, including taxes.
In case we consider that only the base price is taxable (and not the added taxes neither the recycling fee), and that before the carbon tax there were no taxes applied as such, then the answer is €112 .
Hello, the UHP tire cost before March was € 107.99 (€ 108.00 in rounded numbers) Here are the figures:
New teaser on Monday