Mr. Kanyama received two job offers in Kenya for which he has sought your advice. Both...

 

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Mr. Kanyama received two job offers in Kenya for which he has sought your advice. Both offers require him to commence work on 1 January 2022. Offer A Mr. Kanyama would be employed as a public relations officer with KQ, a regional airline with its headquarter in Nairobi, Kenya. The offer provides for the following: A basic salary of Sh. 150,000 per month. A monthly bonus of 5% of the basic pay to be received on the ninth day of the month following that to which the pay relates. A fuel allowance of Sh.10 per kilometre. He estimates to cover 5.000 kilometres per annum, half of which will be on official duties. Entrance fees of Sh. 3,000 to join the Public Relations Society of Kenya would be paid for him by the company. He would however, personally pay the subscription to the society amounting to Sh. 12,000 per month commencing 1 February 2022. 1. 2. 3. 4. 5. 6. He will be provided with free mobile phone airtime worth Sh.15,000 per month commencing 1 February 2022. Half of this will be utilised on official calls. The company will provide him with a house whose market rental value is Sh. 25,000 per month. The company will deduct Sh. 8,000 from his pay in respect of the house each month. The company will furnish the house fully at a cost of Sh. 560,000. In addition, the company will provide a night watchman and a house servant, each of whom will be earning Sh. 6,000 per month. Offer B Mr. Kanyama would be employed as Director of Human Resource with Mabungo Ltd, a private limited company specializing in security issues around Allsops. The offer provides for: 1. A basic salary of Sh. 200,000 per month and an allowance of Sh. 12,000 per month for attending board meetings. 2. An annual allowance of Sh. 220,000 for the purchase of office attire in line with his new status. 3. A Mercedes Benz saloon car costing Sh. 1.800.000 (3,000 c.c) 4. A night watchman (at a monthly salary of Sh. 8,000). The company will settle Mr. Kanyama's water and electricity bills. 5. A provision for catering for his hospital bills in scheme that caters for senior employees only. His average hospital bill is Sh. 450,000 annually. 6. His employer will pay Sh. 34,000 monthly to his pension scheme. The scheme is registered with RBA. Required: Evaluate the tax impact of each job offer and advice Mr. Kanyama on which one he should accept. Mr. Kanyama received two job offers in Kenya for which he has sought your advice. Both offers require him to commence work on 1 January 2022. Offer A Mr. Kanyama would be employed as a public relations officer with KQ, a regional airline with its headquarter in Nairobi, Kenya. The offer provides for the following: A basic salary of Sh. 150,000 per month. A monthly bonus of 5% of the basic pay to be received on the ninth day of the month following that to which the pay relates. A fuel allowance of Sh.10 per kilometre. He estimates to cover 5.000 kilometres per annum, half of which will be on official duties. Entrance fees of Sh. 3,000 to join the Public Relations Society of Kenya would be paid for him by the company. He would however, personally pay the subscription to the society amounting to Sh. 12,000 per month commencing 1 February 2022. 1. 2. 3. 4. 5. 6. He will be provided with free mobile phone airtime worth Sh.15,000 per month commencing 1 February 2022. Half of this will be utilised on official calls. The company will provide him with a house whose market rental value is Sh. 25,000 per month. The company will deduct Sh. 8,000 from his pay in respect of the house each month. The company will furnish the house fully at a cost of Sh. 560,000. In addition, the company will provide a night watchman and a house servant, each of whom will be earning Sh. 6,000 per month. Offer B Mr. Kanyama would be employed as Director of Human Resource with Mabungo Ltd, a private limited company specializing in security issues around Allsops. The offer provides for: 1. A basic salary of Sh. 200,000 per month and an allowance of Sh. 12,000 per month for attending board meetings. 2. An annual allowance of Sh. 220,000 for the purchase of office attire in line with his new status. 3. A Mercedes Benz saloon car costing Sh. 1.800.000 (3,000 c.c) 4. A night watchman (at a monthly salary of Sh. 8,000). The company will settle Mr. Kanyama's water and electricity bills. 5. A provision for catering for his hospital bills in scheme that caters for senior employees only. His average hospital bill is Sh. 450,000 annually. 6. His employer will pay Sh. 34,000 monthly to his pension scheme. The scheme is registered with RBA. Required: Evaluate the tax impact of each job offer and advice Mr. Kanyama on which one he should accept.

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Offer A Taxable Income Basic Salary 150000 Bonus 7500 Fuel Allowan... View the full answer