Question

Ben Apple is employed at Bakers Biscuits CC which has a financial year end of 30th June every year. The following information relates to Ben’s 2022 year of assessment: Taxable income from employment N$355 000 Income from sales of the woodwork – April 2016 N$50 000 Retirement annuity fund contributions, N$55 0000 Bakers Biscuits CC had a taxable income of N$560 000 in 2020 and N$590 000 in 2021. The entity foresees that taxable income will grow by 20% during the 2022 year of assessment. The entity acquired new manufacturing equipment worth N$900 000 in December 2021. This acquisition was not accounted for in the taxable income prediction. No other significant transactions took place during the year of assessment. Required: Carefully consider the options below and choose the correct option. 

1. The amount to be deducted as PAYE from Ben Apple’s salary for the 2022 year of assessment is: 

a. N$63 200 once per annum 

b. N$53 200 once per annum 

c. N$49 170 once per annum 

d. None of the above 

2. The 1st provisional tax payment if he wants to pay the minimum amount and avoid any penalties and interest, will be: 

a. Payable on 31 August 2021 and will be N$29 200 

b. Payable on 30 September 2021 and will be N$36 500 

c. Payable on 31 August 2021 and will be zero 

d. None of the above 

3. The 3rd final top-up payment, if he paid N$1 000 as a 1st and N$2 000 as a 2nd provisional tax payment, will be: 

a. N$6 800 

b. N$14 000 

c. N$11 000 

d. None of the above 

4. Mr. Ben’s tax return with the final top-up payment is due on: 

a. 31 August 2022 

b. 30 September 2022 

c. 28 February 2022 

d. None of the above 

5. The taxable income for Bakers Biscuits CC for the 2022 year of assessment will be: 

a. N$408 000 

b. N$708 000 

c. N$558 000 

d. None of the above

6. The payment dates for provisional tax for Bakers Biscuits CC for the 2022 year of assessment will be: 

a. 31 December 2020, 30 June 2021, and 31 January 2022 

b. 30 August 2020, 28 February 2021, and 30 September 2022 

c. 31 December 2020, 30 June 2021, and 30 January 2022 

d. None of the above

Answer 1

1.

c. N$49,170 once every year

 

Explanation:

The correct answer is c. N$49,170 once every year. this is often as a result of the withholding tax is calculated on the nonexempt financial gain, that during this case is N$355,000. The withholding tax is calculated at 200th of the nonexempt financial gain, that equals N$49,170.

 

2.

a. owed on 31 August 2021 and can be N$29,200

 

Explanation:

The correct answer may be a. owed on 31 August 2021 and can be N$29,200. this is often as a result of the 1st probationary tax payment is due on 31 August 2021 and is calculated at 200th of the nonexempt financial gain, that equals N$29,200.

 

3.

c. N$11,000

 

Explanation:

The correct answer is c. N$11,000. this is often as a result of the 3rd final high up payment is due on 30 Sep 2021 and is calculated at 200th of the nonexempt financial gain, that equals N$11,000.

 

4.

c. 28 28 2022

 

Explanation:

The correct answer is c. 28 Feb 2022. this is often as a result of the legal document with the ultimate high up payment is due on 28 Feb 2022.

 

5.

c. N$558,000

 

Explanation:

The correct answer is c. N$558,000. this is often as a result of the nonexempt financial gain for Bakers Biscuits CC for the 2022 year of assessment are going to be N$558,000.

 

6.

c. 31 Dec 2020, 30 June 2021 and 30 Jan 2022

 

Explanation:

The correct answer is c. 31 Dec 2020, 30 June 2021 and 30 Jan 2022. this is often as a result of the payment dates for probationary tax for Bakers Biscuits CC for the 2022 year of assessment are going to be 31 Dec 2020, 30 June.

1.    c. N$49,170 once every year

2.    a. owed on 31 August 2021 and can be N$29,200

3.    c. N$11,000

4.    c. 28 28 2022

5.     c. N$558,000

6.     c. 31 Dec 2020, 30 June 2021 and 30 Jan 2022