Macheso was employed on a three-year contract as an administration manager for Magocha Plc. Machesos employment contract for the three years only provided for an annual salary of P650,000 and an annual bonus of P150,000. Machesos contract will end on 30 June 2019 and the employer has informed Macheso that her contract will be renewed for a further three years. In addition, the employer has informed Macheso that her total package will remain P800,000, all inclusive, but Macheso is free to restructure her salary in any efficient manner she may choose. Machesos major annual current and projected cash outflows for 2019/2020 tax year were as follows:

P

Rent for accommodation (Rateable value P850,000) 120,000

Medical aid contributions 50,000

Annual leave passage 20,000

Subscriptions to BICA 5,500

Savings 75,000

Domestic expenses 110,000

Maid 18,000

Family holidays 50,000

School fees (Son) 88,000

Furniture 45, 000

Motor Vehicle 125,000

DStv Subscriptions 4,800

Traffic Penalties 3,500

Calculate the tax liability for Macheso for the tax year ended 30 June 2019 and to recommend how his employment income can be restructured more efficiently for tax purposes . Your answer must show the tax savings resulting from your recommendation based on the 2019/2020 projections. (20 marks)