On 1st January 2022, Mr. Wafula was employed by Kirinyaga Construction Limited as Chief Engineer. He is entitled to a basic salary of Ksh.130,000p.m (P.A.Y.E Sh.30,000p.m). The following information relates to his employment for the year 2022.

1.He was entitled to entertainment allowance of Sh.50,000p.m from the employer.

2. He took his meals in the company canteen together with all other employees. though the meals cost approximately shs. 600 per day in a canteen (assume 260 working days in a year ).

3.The employer contributed on his behalf sh.20,000pm to a registered provident fund.

4.He was provided with a house by the employer whose market rental value was sh.15,000p.m. The employer deducted 2% of the basic salary as rent for the house.

5.The employer paid his life insurance premium which amounted to sh.8,000p.m

6.He was provided with company car (2,000cc) which was purchased at a cost of sh.1,800,000. 40% of the cars use is private

7. He paid mortgage interest of shs.320,000 (gross) p.a. on a shs.8000,000 mortgage on his new home and school fees of shs. 160,000 p.a. respect of his son who attends state university.

8. The company pays for private medical insurance for his directors and senior staff. The cost attributable to Sifujo Wafula was shs. 135000

Required:

a)The total taxable income of Mr.Wafula for the year. (10 Marks)

b)Tax payable from the income computed above. (3 Marks)

 

Answer rating: 100% (QA)

To calculate Mr Wafulas total taxable income for the year 2022 we need to consider all his income so... View the full answer