MSc Acc AND Fin $2023/2024.$

PRACTICAL CASE ONE

$($a$)$ Mr$.$ Tuwe Wazalendo imported a saloon car with $1,800cc$ on ${21}^{st}$ February. $2024$ for

business use, the car manufactured since $1^{st}$ January $2016.$ During the V$.$A$.$T control

verification exercise, the commissioner found that taxes were not paid in full as they

had been affected by importation of saloon. This has been found via ERV which

reflected the following;

Import Duty $=$ Tshs $2,000,000$

Excise Duty $=$ Tshs $4,000,000$

VAT $=$ Tshs $5,000,000$

The saloon car was acquired for US $$10,000$ at V$-$WEST current retail selling price

after depreciation which is $100\%$ of the aggregate sum of taxes payable to

customs department and $60\%$ of CIF as wharfage charges.

The tax rates at the time of importation were exchange rate Tshs$\mathrm{.}2,550/$US$$,$

import duty $25\%,$excise duty $5\%$ or $10\%$ or $15\%$ or nil depending on size of engine

of the car and VAT $18\%.$

REQUIRED: Determine the Total duties$/$tax paid to the Tanzania Revenue $(15$ marks$)$

PRACTICAL CASE TWO

a$)$ In principle, if there is nothing paid or payable for a supply, then it is not a taxable

supply. Safeguards are needed to prevent the operation of this principle from

allowing transactions to escape a charge to VAT in inappropriate situations.

Required: Discuss the relevance of the above principle.

$(5$ marks$)$

$($b$)$ The following transactions were extracted from the ledger balances of BABA BS

Suppliers, a registered business for Value Added Tax $($VAT$)$ purposes for the month

of June $2023$:

Additional information:

Goods imported valued at a cost of TZS$.12,500,000$ were not recorded;

freight charges was TZS$\mathrm{.}1,500,000$ and insurance TZS$\mathrm{.}800,000.$ Import duty

was charged at $20\%$ and excise duty at $10\%.$

The firm received credit notes valued at TZS$.580,000$ in respect to

erroneous invoices issued by suppliers.

A debtor of goods valued at TZS$\mathrm{.}812,000$ was declared bankrupt, and the

debt written off.

The firm issued debit notes of TZS$\mathrm{.}522,000$ to debit customers because

of price adjustments.

All transactions are exclusive of VAT at a rate of $18\%$ where applicable.

REQUIRED: Calculate the DIT, OUTPUT TAX and Value Added Tax $($VAT$)$ payable

by $($or refundable to$)$ BABA BS Suppliers for the month of June $2023.$