1. Malusi Zingisa, CA(SA) the CEO of Zingisa, set up a meeting with Nokulunga Nxumalo, CA(SA) to discuss some tax saving ideas:

The rental income received than received in relation to 200 guests who stayed less than 28 days in bed & breakfast could be changed to more 30 days longterms on the invoices and accounting system so that the output tax (VAT liability) can be deducted for VAT purposes. Malusi Zingisa stated that this has been done in the past and he always been able to justify this. He added that the Zingisa group must meet certain targets based on shareholders expectations. Malusi Zingisa hinted to Nokulunga that, if she made this change, it would be reflect favourably on her performance evaluation. R3 302 800 was received from guests who did not stay longer than 20 nights. Guests do not stay for more than 20 days at a time.

Discuss in terms of the VAT Act 89 of 1991, Taxa Administration Act of 2011 or the SAICA Code of Conduct any concerns you have in respect of the ethical issue that Rebecca is facing with regards to the tax saving ideas suggested by Malusi Zingisa. (15 marks)

Communication mark- Logical argument