QUESTION $1(40$ marks$)$

BioEnergize $($Pty$)$ Ltd $($BioEnergize$)$ is a company in the renewable energy sector, focusing on innovative solutions that harness the power of organic waste to generate clean and sustainable energy. Their flagship project involves working with chicken waste to produce renewable energy and contribute to environmental conservation. BioEnergize is a resident of South Africa and a registered Category B VAT vendor, which makes $98\%$ taxable supplies. BioEnergize has a February year$-$end.

The following are all the transactions incurred by BioEnergize for the two$-$month VAT period under review ending February $2024.$

Description Note Value $($VAT Inclusive where

applicable$)$

Receipts and accruals

Sale of Renewable Energy $1$ R$650000$

Rental of Equipment $2$ R$43000$

Government Incentives $3$ R$400000$

Insurance payout $4$ R$62000$

Residential accomodation $5?$

Expenditure

Purchase of chemicals for waste

processing

R$125000$

Fuel R$50000$

Depreciation R$80000$

Advertising and marketing costs $6$ R$23000$

Salaries paid R$350000$

Maintenance costs R$60000$

Training and development $7$ R$30000$

Interest payments $8$ R$16000$

Internet banking fee R$500$

Bus and taxi fares $9$ R$6000$

Use of employer$-$owned vehicle $10?$

Bad debt $11$ R$5000$

Canteen for employees $12$ R$60000$

Water and electricity R$20000$

Property rates and taxes R$13000$

Notes:

$1$ Sale of Renewable Energy:

BioEnergize sells generated electricity from biogas to neighboring communities.

$2.$ Rental of Equipment:

BioEnergize received payment in advance from GreenVista Village $($Pty$)$ Ltd on $29$

February $2024$ for the rental of one of BioEnergize's waste processing equipment. The equipment was only delivered and invoiced on $10$ March $2024.$

$3.$ Government Incentives:

BioEnergize receives incentives from the government for producing renewable

energy.

$4.$ Insurance payment received:

The insurance company paid out R$62000$ for a claim relating to damage sustained by BioEnergize$$s warehouse due to an explosion event.

$5.$ Lease of a two$-$bedroom flat:

BioEnergize paid R$15000$ for the two$-$month rent of a two$-$bedroom flat. The use of the flat is given to the farm manager at a reduced charge of R$5000$ per month.

$6.$ Advertising and Marketing:

Advertising and marketing expenses incurred for promoting BioEnergize's renewable energy solutions.

$7.$ Training and development:

Expenses related to training employees on new technologies and safety protocols.

$8.$ Interest payments:

Interest expenses accrued on the financing obtained for the establishment of the waste processing facility.

$9.$ Bus and taxi fares:

BioEnergize assists in paying the bus and taxi fares of staff to and from the farm.

$10.$ Use of employer$-$owned vehicle:

A single cab bakkie was purchased for R$350000($including VAT$)$ on $1$ August $2023.$

BioEnergize grants one of their employees, Mr$.$ Rohan, the plant manager, the right to use the farm$$s single cab bakkie. Mr$.$ Rohan bears the full cost of maintaining the vehicle. Mr$.$ Rohan was granted the right to use the vehicle on $1$ October $2023.$

$11.$ Bad debt:

Bad debt of R$5000$ was written off by BioEnergize due to a loan given to an employee who has left town without repaying the loan.

$12.$ Canteen:

BioEnergize provides a canteen for the employees to enjoy a meal during lunchtime on the farm. BioEnergize pays a catering company a monthly fee of R$30000$ for the staff refreshments and meals provided daily.

REQUIRED:

Calculate the total net VAT payable by or refundable to BioEnergize $($Pty$)$ Ltd for

the two months ending $29$ February $2024.$

Please use the following template to structure your answer:

Description$/$transaction Calculation $/$

Explanation

Output tax Input tax

$$ When there is no VAT effect in respect of a specific item, clearly state this and

provide a brief reason why there is no VAT effect.

$$ Assume all parties are registered VAT vendors from R$.$S$.$A

$$ Assume a VAT rate of $15\%.$

$$ Round to the nearest rand.

$(40$ marks$)$