Carlos is 30 years old and married (out of community of property). The couple has a four-year old child. Carlos acquired the assistance of an unqualified accountant to calculate his net normal tax for the year ended 28 February 2022. The accountant determined Carlos’s taxable income as R813 915 You ascertained that the accountant’s calculation of R813 915 did not take any of the information contained in the following 3 items (and the impact thereof) into account:

1. Provident fund and retirement annuity fund contributions Carlos made contributions, amounting to R40 000, to a provident fund during the 2022 year of assessment. In addition, his employer also made additional contributions, amounting to R20 000, to the provident fund, on his behalf. Carlos also made contributions, amounting to R190 000, to a retirement annuity fund.

2. Medical scheme fee contributions and expenses The medical scheme fee contributions and expenses are made up as follows: R Carlos’s own contributions paid to the medical scheme for the year 32 000 Qualifying medical expenses not paid by or recoverable from the medical scheme 25 000 Carlos’s employer also contributed an amount of R12 000, in addition, to the medical scheme, on his behalf. Carlos and his family are all members of the medical scheme. No member of the family has a disability as defined.

3. Gross foreign dividends (from a unit trust) amounting to R4 000. No foreign tax was withheld from the foreign dividends.

REQUIRED: MARKS Calculate Carlos’s net normal tax for the year of assessment ended 28 February 2022. You may assume that Carlos’s remuneration amounted to R785 900 (correctly calculated) for the 2022 year of assessment.

Answer rating: 100% (QA)

1 Provident fund and retirement annuity fund contributions R40000 R20000 ... View the full answer