Sifujo Wafula currently working in Mwea Tembere In Kirinyaga is a field officer with Aroma-Pishori Ltd.. He has provided you with the following information for the year 2019.

His basic salary was shs.560, 000 p.a plus a bonus, estimated at 15 % of his annual salary, (PAYE deducted shs. 115,680). He also received an allowance of shs. 10,000 per month to be spend exclusively in customer entertainment.

Sifujo Wafula was required to move to Nairobi. His relocation expenses were estimated at shs. 70,000 and reimbursed in full was received from the company.

He was also given a loan which of shs. 400,000 on 2 Jan 2019 towards the cost of any new furniture he needed, on which charged interest of 5% p.a. he was also given an annual allowance of shs. 20,000 to compensate for the higher cost of living in Nairobi as compared to Kirinyaga.

The company provided with a new 2,500 cc car costing shs. 1370,000 and all his car running expenses including servicing, fuel and insurance estimated at shs. 40,000 p.a. were paid by the company. He estimated his annual mileage to be 25,000 miles, broken down as follows.

10% - unconnected with business.

40% - travel from home to his main work Station.

50% - travel from his main base to a second base.

The company pays for private medical insurance for his directors and senior staff. The cost attributable to Sifujo Wafula was shs. 135000.

He took his meals in the company canteen together with all other employees. though the meals cost approximately shs. 600 per day in a canteen (assume 260 working days in a year ).

Sifujo Wafula paid shs. 20,000 p.a. to the employment agency which found him the position in consideration of special agency and business acquaintances. He also paid shs.90,000 for new clothing of standard considered necessary for the marketing manager of paper pan mills (k) Ltd.

He paid mortgage interest of shs.320,000 (gross) p.a. on a shs.8000,000 mortgage on his new home and school fees of shs. 160,000 p.a. respect of his son who attends state university.

He paid by standing order a contribution of Shs.105,000 p.a. to Kenya Heart Foundation a registered charity.

Required:

Give a concise but clear explanations of the tax treatment of the incomes, benefits and payments above. Computations are not required (15 Marks)