Mr Lungu has lodged disposal documents with the Zambia Revenue Authority of his property in Kabulonga (High Cost Area); ZRA is suspicious with the selling price he indicated of k550, 000 as it is a prime area. After an evaluation of the value of properties in the same area, it was found out that the prices in Kabulonga area range from K1,200,000 to K2,500,000.

Required:

1. Calculate the PTT assessable on Mr Lungu.
2. How do you explain the realisable value on property on disposal of property regarding assessibility to Property Transfer Tax (5 MARKS)

(b) Mr Tembo has shares in XYZ Limited, a company not listed on LuSE. He bought 500,000 shares in 2010 for K2,000,000. He has disposed off 300,000 shares for K3,000,000.

Required:

1. Calculate the PTT assessable on Mr Tembo.
2. How do you explain the realisable value of Shares on disposal regarding assessibility to Property Transfer Tax

(5 MARKS)

(c) Jeff is starting up a graphic and painting company in Mansa. He has bought the following equipment from Germany which will come through Sesheke border.

1. Reprographics machine Euros 6,800 (FOB)

2. Printer Euros 1,200 (FOB)

3. Electric cutter Euros 400 (FOB)

The Germany Company estimates the following cost for:

1. Shipment to Walvis Bay $ 700
2. Insurance (Marine) $ 200

Jeff will have to incur cost of buying the equipment by road up to Katima Mulilo. The costs are estimated at K5,000.

Required:

1. Customs Duty
2. Excise Duty
3. Import VAT
4. Total Cost of the equipment. (10 MARKS)