Question One: A. Circle the alternative against the correct answer (10 Marks)

(i) Which of the following statements does not define the term Tax

a) It is a leakage from the circular flow of income in the public sector, except for loan transactions.

b) It is a compulsory levy imposed upon various categories of assesses.

c) Its a price paid for public goods and services consumed.

d) Its a non-quid-proquo payment whose perceived consideration in public goods.

(ii) Other sources of government revenue other than taxes include the following except:

a) Road licenses

b) Driving permit issue and renewal fees

c) Cost sharing programmes

d) Withholding tax

(iii) Zungu aged 40, received Ug. Shs. 8,800,000/= as income from employment during month of May 2021, compute his tax liability assume he is a non-resident.; a) 1,688,000/=

b) 1,703,000/=

c) 2,542,000/=

d) 2,565,500/=

(iv) The mini-max point describes the point where:

a) Marginal rate of tax is maximum

b) Marginal rate of tax is minimum

c) Marginal rate of tax is average d) The threshold is maximum

(v) Direct and indirect taxes can be distinguished using the following principles:

a) Incidence of a tax and mode of assessment

b) Tax base, incidence of a tax, mode of assessment and relationships between tax payers and collectors

c) Incidence of a tax, tax base, mode of assessment

d) Relationship between tax payer and tax collector

(vi) Before the URA regime, the duty of the chief assessor was to include. Except.

a) The issuing of tax returns.

b) Collecting taxes

c) The receipt and examination of the completed returns.

d) The preparation and issue of notices of assessments based on the returns.

(vii) Which of the following is a non-deductable expenditure when deriving chargeable income from business

a) Provision of meals, refreshments or entertainment to all employees.

b) Specific bad debts written off.

c) Lost stock Recoverable.

d) Insurance premiums.

(viii) The ability to pay theory in taxation argues that;

a) Taxation should be a function of a persons wealth.

b) Government should spend to the extent of tax revenue collected.

c) Tax revenue should be collected to the extent that individual marginal utility of public goods is equal to marginal tax contribution.

d) Taxation should be a function of ones wealth to ensure social justice.

(ix) Which of the following best describes the benefit of service theory of taxation?

a) Each individual must pay tax for the benefit of society.

b) Tax is a function of ones wealth. c) Individuals should pay tax according to his ability.

d) None of the above.

(x) A partnership is resident in Uganda for the year of income if:

a) It was formed under the partnership Act cap 86 laws of Uganda

b) It has the majority of its operations carried out in Uganda

c) One of the partners was resident during the year of income

d) All the above

B. Discus the major challenges faced by the government of your country in tax administration and highlight on the steps taken to overcome them. (5 Marks)