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Suleiman Kombo is employed as the Managing Director of Utamu Distributors Ltd., a tax exempt company. During the year ended 31 December 2018, he
Suleiman Kombo is employed as the Managing Director of Utamu Distributors Ltd., a tax exempt company. During the year ended 31 December 2018, he presented the following information: 1. His basic salary was Sh. 120,000 per month (PAYE Sh. 48,000 per month). 2. He was provided with lunch by the employer from 1 August 2018 of Sh.4, 800 per month. 3. He was provided with a fully furnished house fitted with water and electricity. The employer paid a monthly rent of Sh. 45,000. He was deducted 10% of his basic monthly salary for rent. The cost of furniture was Sh. 300,000 while the monthly electricity and water bills was Sh. 3,500 and Sh. 2,800 respectively. 4. The company paid for him life insurance premiums of Sh. 6,000 per month for each member of his household from 1 September 2018. He had included himself, his wife and their son in the insurance policy. 5. He contributed 10% of his monthly pay towards a registered pension scheme while the employer contributed 15% of his basic pay towards the same scheme. 5. He enjoyed free medical treatment under a medical scheme operated by the company for all employees. His medical expenses were assessed at Sh. 150,000 during the year. During the year the company paid a total of Sh. 35,000 as school fees for his son studying in a County School. This amount was not included in the company's income statement during the year. On 1 August 2018, the company provided him with the following: A Land Rover which was acquired at a cost of Sh.1,800,000 with an engine capacity of 3,000cc. A gardener and a night watchman whose monthly salaries was Sh.12,500 and Sh.15,000 respectively. He invested in real estate and earned a net rental income of Sh.72,000 after deducting the following expenditure: Sh. Caretaker's wages 120,000 Fencing 40,000 Loan repayment 320,000 Insurance rent and rates 48,000 Partitions 60,000 Capital allowances 22,000 Gross rentals withholding tax paid 68,200 le received net dividends of Sh.42,500 from Maziwa Co-operative Society during the year. -quired: Total taxable income for Suleiman Kombo for the year ended 31 December 2018. Tax payable (if any) from the income computed in (b) (i) above. Comment on any information not used in your computations under (b) (i) above.
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