QUESTION $2(30$ marks$)$

Client Request # $2-$ Advise on tax implications on transactions for an audit client. The Tax Director has asked you to draft advice for the Client Bakertilly Auditors:

a$)$ Bakertilly Auditors have indicated that their Client TWC Pty Ltd has recorded bad debts amounting to P$500,000$ in their books which they have been carrying over for years now and recommending for write off. $(3$ marks$)$

b$)$ TWC has a block of flats which are leased, and they have spent P$300,000$ on maintenance costs before leasing to another tenant SSI Pty Ltd$.(3$ marks$)$

c$)$ TWC has included in administration expenses speed fines of $25,000$ committed by their ambulance drivers for the course of the year. $(3$ marks$)$

d$)$ During the recent floods TWC donated P$1000\mathrm{.}00$ to Botswana Council for Disabled shelter and included the amount as an expense for calculation of taxable income. $(3$ marks$)$

e$)$ Advertising fees for knowledge dissemination on their new Project of Kgatelopele of P$10,000$ were included in the administration costs. $(3$ marks$)$

Required:

a$)$ Advise the client on income tax treatment on this transaction. $($i$.$e$.$ are they allowable or not for income tax calculations?$)(15$ marks$)$

b$)$ What are the essential elements of Self$-$Assessment Tax $($SAT$)$ by Corporates? Explain. $(5$ marks$)$

TWC has also issues with late returns of Income tax. Discuss civil penalties under income tax.$(10$ marks$)$