QUESTION ONE

$[55]$

Lunga Dlamini, aged $56,$ is a resident of the Republic. Lunga is married out of community of property. He is currently employed at Quantico $($Pty$)$ Ltd$.$ The following information relates to Lunga for the year of assessment ended $29$ February $2023$:

Lunga earned a basic salary of R$92500$ per month for the $2023$ year of assessment. On $1$ December $2022,$ Quantico $($Pty$)$ Ltd paid him a gross bonus equal to one month's salary, to reward him for his excellent work performance.

Lunga earned local dividends of R$24200$ and local interest of R$52450$ from his investments. He also earned the equivalent of R$14940$ in foreign dividends $($Lunga holds $2\%$ of the equity shares in the foreign company$).$

Lunga's pension fund contributions for the year of assessment totalled R$110000.$ Quantico $($Pty$)$ Ltd contributed an additional amount of R$83250$ to the pension fund on Lunga's behalf.

Lunga is a member of Momento Medical Aid. His wife $($Busi$)$ is his only registered dependent. Quantico $($Pty$)$ Ltd and Lunga each contributed an amount of R$1500$ per month towards the medical aid membership. During the $2023$ year of assessment, Lunga paid R$12210$ in medical expenses not covered by the medical aid. Neither Lunga, nor his wife have a disability as defined.

Lunga receives a monthly travel allowance of R$6250$ for using his car for business purposes. Lunga pays all the expenses for the car but has not kept accurate records of expenditure for the $2023$ year of assessment. He has maintained a logbook which reflects that his opening odometer reading on $1$ March $2022$ was $30750$ kilometres, and his closing odometer reading on $29$ February $2023$ was $56100$ kilometres. Total business travel is recorded as $5200$ kilometres. Lunga's car cost him R$609500($including VAT of R$79500).$

From $1$ March $2022,$ Lunga and his wife were granted the use of a residential home owned by Quantico $($Pty$)$ Ltd$.$ The house has $5$ rooms in total and is unfurnished. Quantico $($Pty$)$ Ltd pays for all power$/$fuel supplied. Neither Lunga, nor any of his relatives own any shares in Quantico $($Pty$)$ Ltd$.$ Lunga's remuneration proxy is R$925000.$

During the year of assessment, Quantico $($Pty$)$ Ltd gave Lunga trading stock with a market value of R$10620,$ free of charge. The stock cost Quantico $($Pty$)$ Ltd R$9000.$

Quantico $($Pty$)$ Ltd runs a canteen for all their staff. On average, Lunga eats there one meal a day, $5$ days a week, $49$ weeks a year. He saves approximately R$25$ per meal compared to the price he would have paid at a public restaurant.

Lunga and his family enjoyed a $10-$day holiday at a luxury resort. Quantico $($Pty$)$ Ltd owns a time$-$share scheme in the resort and allows employees to utilise this benefit at a $50\%$ discounted rate. The holiday accommodation could normally be let at a flat rate of R$2000$ per day.

Lunga receives an entertainment allowance of R$1600$ per month to entertain clients of Quantico $($Pty$)$ Ltd$.$ He has kept records of his actual expenditure on entertainment, which totalled R$15000$ for the $2023$ year of assessment.

Lunga spent a total of $5$ days away from home when he was sent on a business trip. Quantico $($Pty$)$ Ltd provided him with an allowance of R$600$ per day to cover meals and incidental costs. He did not kept records of his actual expenditure incurred on the trip.

Required: Calculate Lunga's normal tax liability for the year of assessment ended $28$ February $2023.$ Assume remuneration of R$1554230$ for the purposes of calculating the section $11$F pension fund deduction. Round off to the nearest Rand. Show ALL workings. $(55$ marks$)$