1. Fuma Ltd had the following results for the year ended 31 December 2018

P

Taxable income from trading 2,926,410

2. The company made the following Self-Assessment Tax (SAT) payments in respect of the year ended 31 December 2018:

P

31 March 2018 144,000

30 June 2018 192,000

30 September 2018 192,000

31 December 2018 144,000

––––––––

672,000

––––––––

3. The company had a tax bill for the year ended 31 December 2015 amounting to P960,000 which the company is disputing. The directors had directed that the amount should not be paid since they are disputing the charge. They are of the view that the tax bill must only be paid after the due process has been followed. Makambe has been asked to advise the board on the taxation implications of this decision.
4. The company made PAYE deductions and withholding taxes on payments to non-residents for the month of December 2018, but these were paid over to BURS on 31 January 2019.
5. Due to cash flow problems, the company can only manage to settle any outstanding tax payment for the year ended 31 December 2018 on 30 June 2019 after having received the amount outstanding from a major customer.
6. The tax return for the year ended 31 December 2017 was submitted to Burs on 30 June 2018. In addition, an amount outstanding from a major customer amounting to P1,340,000 was not included in the previous year’s tax return since the directors wanted to include it in the current year when the customer finally pays.

Required

You are required to prepare detailed briefing notes for the partner who is to attend the Fuma Ltd board meeting, including explanations and calculations which:

(a) Outline, the offenses that have been committed by Fuma Ltd, stating the implications on the company. (10 marks)

(b) Advise the company on the due process to be followed in respect of the disputed tax bill for the year ended 31 December 2016. (5 marks)

(c) Explain if any interest will be payable in relation to the SAT payments, including the calculation of interest due (if any). (5 marks)