Use the following tax tables to answer your questions, where necessary.

Rates of tax from 2016/2017 tax years

Resident companies On taxable income

Standard rate 22%

Manufacturing company rate 15%

Non-resident companies

Standard rate 30%

Resident individuals

P0 – P36,000 Nil

P36,001 – P72,000 Nil + 5% of excess over 36 000

P72,001 – P108,000 P1,800 + 12·5% of excess over 72 000

P108,001 – P144,000 P6,300 + 18·75% of excess over 108 000

Over P144,000 P13,050 + 25% of excess over 144 000

Capital gains – individuals

P0 – P18,000 Nil

P18,001 – P72,000 P0 + 5% of excess over 18 000

P72,000 – P108,000 P2,700 + 12.5% of excess over 72 000

P108,000 – P144,000 P7,200 + 18.75% of excess over 108 000

Over P144,000 P13,950 + 25% of excess over 120 000

Capital gains – companies

Net aggregate gains are taxable at the company rates of tax.

Tax on Foreign dividend 15%

Basis of valuation of benefits

Individuals’ vehicle benefit

Vehicle cost Employee benefit Fuel cost adjustment

P1 - P50 000 P2 500 P1 000

P50 001 - P100 000 P5 000 P2 000

P100 001 - P150 000 P7 500 P3 000

P150 000 - P200 000 P10 000 P4 000

Benefit on the excess of P200 000 is 15% thereof with a maximum fuel cost adjustment of P5 000.

Individual’s housing benefit:

If rated:

10% of the property’s rateable value prorated by occupation and reduced by any contribution made by the employee.

If not rated:

Gross floor area x P250 per sq metre x 8% for a standard building

The benefit is prorated by period of use and reduced by any contribution made by the employee.

Dorah Chibaya is the finance director of Dunlop (Pty) Ltd. Details of her earnings for the year ended 30 June 2017 were:

P

Salary – P25 000 pula per month

Commission 280,000

Company car Cost 320,000

Company provided housing Rateable value 925,000

Utilities paid by the company 88,865

School fees paid by the company 63,872

Medical aid paid by the company 44,618

Cell phone allowance 48,000

PAYE withheld 160,000

Other information:

1. Dorah is a member of the company’s approved pension scheme to which she contributes 8% of her basic salary and the company contributes 12%

2. Dorah pays P44, 000 towards her company provided house.

3. Dorah was reimbursed P25, 000 for entertainment expenses which she had incurred during the year.

4. During the year Dorah cashed in some of her leave days for P34, 000.

5. In October 2016, the Labour Court awarded Dorah P90, 000 as a result of a pay dispute against the company which commenced in the previous year.

Required:

(i) Calculate Dorah Chibaya’s taxable income for the year ended 30 June 2017.

Note: Indicate any amounts not taxable or not deductible by the use of zero (0). (12 marks)

(ii) Calculate the tax payable by or refundable to Dorah Chibaya for the tax year ended 30 June 2017. (3 mark)

(15 marks)

defined