The prevailing tax rate is the sales tax rate that is applied by default to all of your products. To set the tax rate go to Products->Tax Groups->Prevailing Tax Group. The rate can be created in the gray box in the center of the page. Be sure to save your tax rate by clicking the floppy disk icon in the upper right hand corner. After entering and saving it there, it will appear here in Basic POS Settings.
For more information on setting up prevailing tax rate and other tax rates, please click here.