Taxation should be administered in such a way as to create minimum pain to the payer There are laid down principles that policy makers should take into account in making tax laws; these are referred to as canons of taxation. Maina a businessperson in Kasese has been operating a general merchandise shop for the last five years. He is a resident in Uganda by taxation definition. He is a registered VAT person as far as his business is concerned. During the Month of November 2021, he purchased taxable supplies (All Tax Exclusive) at UGX 56,000,000; and made sales of taxable supplies worth UGX 86,000,000 (tax inclusive). He is employed with PPB Ltd a Kampala based company and has some houses for rent as a business. Someone told him that he had to pay passage cost or at least get a life insurance to overcome this. 

Location	Rental Revenue (UGX)	Maintenance expenses (UGX)
Katanga	15,000,000	1,000,000
Mutungo	19,000,000	2,000,000
Nakawa	16,000,000	700,000
Kasese	17,000,000	800,000

PPB Ltd owns plant, vehicles and other noncurrent assets. There written down values were: Class I UGX 60,000,000; Class II UGX 123,000,000; Class III UGX 341,000,000; and Class IV UGX 458,000,000. Three computers of UGX 17,000,000 each; a 13-ton lorry of UGX 433,000,000; MD's Car UGX 123,000,000; Furniture and Fittings UGX 24,000,000 were acquired during the period. He bought 7000 shares from PPB Ltd as a senior employee at UGX 500 each. The market price per share was UGX 1,000 each.

Particulars	UGX '000'
Net Taxable Revenue from general merchandise	45,000
Remuneration from Employment:
Monthly Salary	4,600,
Leave Pay	1,200
Gardens Manager	700
Home and Private Services Manager	600
Baby Sitter	600
Monthly Private Communication Data	700
Motor Vehicle (For personal use from 1st July 2020)	56,000
Company Apartment for Accommodation (Market Price)	1,500
Holliday allowance (Foreign Trip)	4,000
Computer given to him as a donation	900
Office chair given to him as a gift	9.7
University Fees for his daughter paid by PPB Ltd (@semester per year)	2,550
Medical Costs paid on his behalf by PPB Ltd	1,800
Refund of cash paid by Maina on behalf of PPB Ltd for Yaka	1,300
Annual Bonus received from PPB Ltd	2,000
Paid for personal fuel to use in his personal car	1,100

Q.1.

1. Describe the application of any five canons of a good tax system PPB Ltd. (10 marks)

Using clear local examples explain the following as used in taxation: in Uganda:

2. Regressive tax. (5 marks)
4. Prepare a tax wear and tear schedule using the information provided above. (10 marks)

Total 25 marks

Q.2.

1. Distinguish between 'residents' and 'taxpayers' in the tax laws of Uganda. (5 marks)

Using the information above advise Maina on his tax liability from:

2. Rental Business. (8 marks)
4. Taxable Employment Income. (7 marks)
6. Tax Liability on Employment Income. (5 marks)

Total Marks 25

Q.3.

1. With sound illustrations, describe the objectives for Government of Uganda taxing her citizens even when the citizens threaten not to vote for them. (6 marks)

With clear illustrations, write a memo to PPB Ltd explaining the following as an expert in taxation concerning:

2. Disallowable and allowable expenses in tax accounting. (2 marks)
4. Application of six canons of a good tax system to taxpayers and for (URA). (6 marks)
6. Residence and its implications on Maina's Tax liabilities. (4 marks)
8. How Maina can evoke the Tax objections and Tax appeals in his circumstances. (7 marks)

Total Marks 25

Q.3.

2. Advise Maina on VAT payable/refundable. (5 marks)
4. Describe the process of lodging objections to URA for the VAT Taxpayer. (6 marks)
6. Describe the roles of taxation in achieving budgetary objectives in government. (8 marks)
8. Discuss the concepts of taxable persons under Excise and Import Duty. (6 marks)

Total Marks 25

Q.4.

Write a special Advice Memo advising Maina on:

2. The legality/illegality Tax evasion, tax avoidance and ethical issues under taxation. (6 marks)
4. Responsibilities in tax accounting. (5 marks)
6. Distinguish between Progressive, Regressive and Proportional Taxes. (6 marks)
8. Discuss the concepts of E- Payment, E- Registration and E-Invoices as used in Taxation. (6

Answer rating: 100% (QA)

Q1 Application of Five Canons of Taxation to PPB Ltd Canon of Equality Taxes should be based on the taxpayers ability to pay For example PPB Ltd could implement progressive income tax rates where high... View the full answer