Exam (elaborations)
TAX1501-23-S2Assessment 1
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TAX1501-23-S2Assessment 1
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Time left 7:56:00 Question 1 Answer saved Marked out of 1 Flag question Question text CustomsDuty is levied to encourage? Select one: a. South Africans to buy from China as their goods are
normally cheaper b. Exports c. Imports d. South Africans to buy locally produced goods
ChatGPT
The correct answer is:
b. Exports
Time left 7:55:04 Question 2 Not yet answered Marked out of 1 Flag question Question text
Alfred Mthembu is 53 years old and self-employed. He is the main member on ProSano medical
scheme. His wife Nelly and two children Alison and Samuel are also members of the scheme. He
contributed R5 500 a month to the medical scheme. In addition, he paid qualifying medical
expenses of R12 500 that were not reimbursed by the medical scheme. His taxable income was
R250 000. None of the members registered in the medical scheme has been diagnosed as a
person with disability as defined by a registered medical practitioner in accordance with the
criteria prescribed by the Commissioner. YOU ARE REQUIRED to calculate the additional medical
expenses tax credit for his current year of assessment. Select one: a. R0 b. R13 944 c. R12 210 d.
R994
ChatGPT
To calculate the additional medical expenses tax credit, we need to follow the formula provided
by the South African Revenue Service (SARS):
Additional Medical Expenses Tax Credit = (Medical Scheme Contributions + Qualifying Medical
Expenses) * 25% - (3 * Taxable Income - 52800) * 7.5%
Given the values:
Medical Scheme Contributions = R5,500 * 12 months = R66,000
Qualifying Medical Expenses = R12,500
Taxable Income = R250,000
Plugging in these values:
Additional Medical Expenses Tax Credit = (66000 + 12500) * 25% - (3 * 250000 - 52800) * 7.5% =
(78500) * 25% - (642000) * 7.5% = R19625 - R48150 = -R28525
However, the additional medical expenses tax credit cannot be negative. It's limited to the lesser
of:
1. 33.3% of (Medical Scheme Contributions + Qualifying Medical Expenses), or
2. 25% of Taxable Income
In this case, the lesser value is 25% of Taxable Income, which is 0.25 * 250000 = R62500.
So, the correct answer is:
, a. R0
Time left 7:54:42 Question 3 Not yet answered Marked out of 1 Flag question Question text Jan
Yellow is 39 years old. During the current year of assessment, he had a taxable income of R278
667. His employer deducted PAYE of R60 394. YOU ARE REQUIRED to calculate his normal tax
liability/refundable. (round your answer to the nearest Rand) Select one: a. R37 948 refundable
from SARS b. R37 948 payable to SARS c. R22 446 payable to SARS d. R22 446 refundable from
SARS
ChatGPT
To calculate Jan Yellow's normal tax liability/refundable, we need to use the progressive tax rates
in South Africa for the specific income range.
Given:
Taxable Income: R278,667
PAYE deducted: R60,394
First, let's calculate the tax amount based on the progressive tax rates:
1. Up to R205,900: 18% tax rate
2. R205,901 to R321,600: 26% tax rate
3. R321,601 to R445,100: 31% tax rate
4. R445,101 to R584,200: 36% tax rate
5. Above R584,200: 39% tax rate
Tax calculation:
1. Tax on first R205,900: 0.18 * 205900 = R37,062
2. Tax on next (321600 - 205900): 0.26 * (321600 - 205900) = R29,872
3. Total tax: 37062 + 29872 = R66,934
Jan's employer deducted PAYE of R60,394. To determine his refundable or payable amount, we
subtract the PAYE from the calculated tax:
Tax liability/refundable = Tax - PAYE = 66934 - 60394 = R6,540
Since the calculated tax is higher than the deducted PAYE, Jan would have to pay an additional
amount to SARS. Therefore, the correct answer is:
c. R22,446 payable to SARS
Time left 7:54:19 Question 4 Not yet answered Marked out of 1 Flag question Question text Kwesi
is 32 years old. He is a member of a registered medical scheme. His employer contributes R5 000
a month to the medical scheme for his membership of it. He does not contribute to the medical
scheme. He paid qualifying medical expenses of R25 000 that were not reimbursed by the
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