TAX1501 Exam Revision May/June Past Papers & Answers 2026 |Taxation of Salaried Persons|

UNIVERSITY OF SOUTH AFRICA (UNISA)
College of Economic and Management Sciences



⋄



TAX1501 — EXAM REVISION
May / June Examination — Model Answers


⋄




Module Code: TAX1501

Module Name: Taxation of Salaried Persons

Total Marks: 80 Marks / 120 Minutes

Examiners: Ms R Moosa & Mr L Motsami




Exam Revision Document — Taxation of Salaried Persons
University of South Africa — May/June 2025

,UNISA | TAX1501 May/June Exam Revision



Question 1 (24 Marks — 36 Minutes): Multiple Choice Questions

Each question carries 2 marks. Only one answer is correct. Below, each question is presented
with the correct answer and a clear explanation of why it is right and why the other options
are wrong.


Question 1.1 — Classification of Taxes

Question: Which among the following taxes is classified as a consumption-based tax?

a) Estate duty
b) Dividends tax
c) Income Tax
d) Value-Added Tax

Correct Answer: (d) Value-Added Tax (VAT)

VAT is levied on the consumption of goods and services at each stage of production and dis-
tribution. The final consumer bears the tax burden, making it a direct consumption-based
tax. Estate duty is a wealth transfer tax on death. Dividends tax is levied on the receipt of
dividends (an income-related event). Income Tax is levied on income earned, not on spending.

Key Distinction
Tax Classification Summary:

• Consumption-based: VAT, Customs Duty, Excise Duty
• Income-based: Normal Income Tax, PAYE, Provisional Tax
• Wealth-based: Estate Duty, Donations Tax, Securities Transfer Tax



Question 1.2 — Wealth-Based Tax

Question: Which of the following taxes is classified as a wealth-based tax?

a) Turnover tax
b) Donations tax
c) Value-added tax
d) Customs duty

Correct Answer: (b) Donations tax

Donations tax is levied on the gratuitous disposal (giving away) of assets or wealth, making it


Page 1 of 19

, UNISA | TAX1501 May/June Exam Revision


a wealth-based tax. Turnover tax is based on a business’s gross income. VAT is consumption-
based. Customs duty is levied on the importation of goods (also consumption-related).


Question 1.3 — Medical Tax Credit (MTC) Sequencing

Question: When is the Medical expense Tax Credit (MTC) considered?

a) Before the annual age rebates, the AMTC, the employee’s tax, and the provisional tax
b) After the annual age rebates, the AMTC, the employee’s tax, and provisional tax
c) Before the annual age rebates and the AMTC, but after the employee’s tax and provi-
sional tax
d) After the annual age rebates are accounted for, but before the AMTC, the employee’s tax,
and the provisional tax

Correct Answer: (d)

The correct order in the tax framework is:

1. Taxable income
2. Normal tax per tables
3. Less: Primary/secondary/tertiary rebates (age rebates)
4. Less: Medical Tax Credit (MTC — s6A)
5. Less: Additional Medical Tax Credit (AMTC — s6B)
6. Less: Employee’s tax (PAYE)
7. Less: Provisional tax
8. = Tax due to / by taxpayer

The MTC comes after the age rebates but before the AMTC, employee’s tax, and provisional
tax.


Question 1.4 — Fringe Benefits in Taxable Income

Question: How are fringe benefits accounted for in the individual’s taxable income frame-
work?

a) Fringe benefits are included in gross income
b) Fringe benefits are deducted from taxable income
c) Fringe benefits do not affect gross income
d) Fringe benefits only affect provisional tax



Page 2 of 19