1 | P a g e Question One : a) Tax administration function refers to assessment of tax payable and the other is the collection of tax due, the responsible body being URA. The commissioner is required to make an assessment of the chargeable income based on the tax payers return on incom e and any other information available within 5 years from the date the return was furnished (S.95(I)). As a graduate of taxation, (i) What is a return on income? (02 Marks) (ii) Explain the types of return on income used by Tax authority; (0 5 Marks) (iii) Expl ain the circumstances where a return of income is not required as per the income tax Act CAP 240 laws of Uganda. (08 Marks) (iv) As a business manager, elaborate on the five factors you must consider when planning for an investment in Uganda in terms of taxes. ( 10 Marks) b) Kill me Quick Investment Ltd is a company dealing in online marketing and sale of electrical located in Kampala Capital City. The Company started operations on July 02 20 2 1 . Fo r the year ended 30th June 2022, the following financial report was extracted by the Accountant: Shs. Shs. Sales Revenue 400,000,000 Less: Cost of sales 253,000,000 Gross profit 147,000,000 Add: Miscellaneous Income 53,000,000 Gross Profit 200,000,000 Less : Operating Expenses Rent of office space 6,000,000 Electricity 3,200,000 Staff Salaries & Wages 2,000,000 Telephone and meals 7,000,000 Repairs 2,600,000 Sales promotions 3,600,000 Depreciation 1 0,000,000 Consultancy fees 5,000,000 Bad debts 7,500,000 Donations 22,000,000 (98,900,000) Surplus 101,100,000 Additional information: 1. Miscellaneous income includes: Shs. 26,000,000 market value of stationery was received from Picfare Industries as a gi ft in respect of prospective business with Kill me Quick Investment Ltd. According to the Accountant Shs. 500,000 was sent to transport the gift to Company premises. 2. Telephone and Meals Shs. 7,000,000: - Telephone constitutes 75% of the above expenses. However, half (50%) of the telephone expenses relate to expenses paid for shareholders domestic consumption. - All the meals were availed to employees on equal basis during working hours . However, the values of benefits were not included in employees ta xable income. Donations: - Donations to African Reach the Aged (a charity NGO) 1,000,000 - Donations to NRM Party (Bye Elections) 19 ,000,000 - Unaccounted for Donations 2 ,000,000 Bad Debt s: - General bad debts estimated by Chief Accountant 6,000,000 - Bad debts (Sky Line a leading customer) 500,000 - Bad debts to employees 1,000,000 Repairs Shs. 2,600,000: - A q uarter of the costs were sent on purchase of Box files and the balance was sent on purchase of a motor cycle on 20 th June, 2022. Investment Ltd taxable income for the year ended 30th June ( 20 Marks) its tax liability for the same period. (05 Marks)