Tangeni is earning a salary and other income. His other income includes rental income, interest income and divided income. His salary is structured as follows:
| 1 March 2020 to 28 February 2021 | |
| Earnings | 812 000 |
| Basic | 500 000 |
| Housing allowance (note 1) | 240 000 |
| Vehicle allowance (Note 2) | 60 000 |
| Entertainment (note 3) | 12 000 |
| Company Contribution | 120 972 |
| Pension Fund (note 4) | 60 000 |
| Medical aid (note 5) | 60 000 |
| Social Security | 972 |
| Deduction | – 415 572 |
| Social Security | – 972 |
| Employee contribution toward pension fund (note 4) | – 42 500 |
| Bond repayment (note 1) | – 200 000 |
| PAYE | – 172 100 |
| Net pay | 396 428 |
Note
1. Tangeni received a housing allowance of $240 000 for the year but his actual bond repayments for the year were only $200 000.
2. Tangeni structured his vehicle allowance to be 75% taxable and 25% non- taxable.
3. Tangeni received an entertainment allowance of $12000 for the year.
4. Tangeni contributed $42500 toward the pension fund. His employer also contributed $60 000 toward the pension fund.
5. The company contributes towards the medical aid fund.
Required:
a) Calculate Tangeni PAYE ( 10 marks)
b) Tangeni incurred the following expenses for business purposes:
a. $25 000 vehicle -related expenses: his total vehicle expenses were $40 000 of which $ 25 000 relate to his business kilometers.
b. $5000 (entrainment related expenses
c. Tangeni received dividend of $20 000 and interest income of $10 000 from a Namibia Unit trust. d. He also receives rental income of $60 000 for the year and incurred $ 25 000 of related rental expenses
e. He did not pay any provisional taxes on his other income. Required:
Calculate Final taxable income in completing Tangeni annual tax returns (15 marks)
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