CTAX12U_TL202_3_2023_Semester 1.

Tutorial letter 202/1/2023 Taxation of Individuals CTAX12U Semester 1 CENTRE FOR ACCOUNTING STUDIES  UNISA 2023 Dear Student Enclosed is the solution to Assignment 02/2023. Please work through the solution alongside the assignments and your answers. This is a significant part of the learning process. Note that it is very important to understand why a specific answer is correct while other options are not. You should identify any problem areas early in the semester and make every effort to understand all aspects of the work that you have studied. We hope that you have found the assignments stimulating. Kind regards, QUESTION 1 (40 marks) Calculation of Walter’s net tax liability for the year of assessment ended 28 February 2018 R R Salary 600 000 Housing (A - B) x C/100 x D/12 (R550 000 – R75 750 (1)) x 18/100 (1) x 8/12 (1) mths 56 910 Use of a company car: R220 000 x 1.14(1) x 85%(1) x 3.5% (1) x 3(1) = R22 384 22 384 Travel allowance 100 000 Less: Travel expenses Actual kilometres: Total 15 500 km Private (3 800 km) Business 11 700 km (1) Deemed cost per kilometre: Cost of vehicle R330 000 Add: VAT 14% R 46 200 Total cost R376 200 Fixed cost R113 179(1)/15 500 km (1) = 7.302 Fuel 1.272 Maintenance 0.582 Total 9.156 Actual cost per kilometre: Fuel R14 000 (1) Maintenance R 7 000 (1) Insurance R12 000 (1) Depreciation (R376 200/ 7 years) (1) R53 743 Total cost R86 743 Actual cost per kilometre: R86 743/15 500km(1) = R5.596 Deemed cost p/km is greater than actual cost p/km Therefore deemed cost p/km is used. Business expense: Local dividends: exempt Foreign dividends Less: exemption Local interest Less: exemption .........................................continued..........................................