Question

1. A tax payer with 1 dependent earned a salary of K25, 000 per year. He earned a gross business income of K55, 000. Allowable deductions in view of Business income is K21, 000. Calculate the net tax liability. 2. Below is different levels of income and expenditure of a certain individual. K3000 K4000 K3000 K10000 K40000 Loss of Takings in Robbery K4000 Depreciation of Equipment K2000 Purchase of Motor Veh cle K7000 Net purchase of Trading stock K8000 Government Pension Government scholarship Coke promotions win Wage earned Sales revenue Tax rebate is K450 Tax rate is at 30% 2014 Calculate: A. Assessable income, B. Taxable income and C. Tax liability​

Answer 1

To calculate the net tax liability, subtract allowable deductions from the total income and then apply the tax rate. In this case, the net tax liability for the taxpayer with 1 dependent is K17,700. Therefore, the correct option is C. Tax liability​.

Step-by-step explanation:

To calculate the net tax liability, we need to start with the taxpayer's total income and then subtract allowable deductions. In this case, the taxpayer's salary is K25,000 and their gross business income is K55,000. We subtract the allowable deductions of K21,000 from the gross business income, resulting in a taxable business income of K34,000.

Next, we add the taxpayer's salary and taxable business income together to get the total taxable income: K25,000 + K34,000 = K59,000.

To calculate the tax liability, we need to apply the appropriate tax rate. Given that the tax rate is 30%, we multiply the total taxable income by 0.30: K59,000 * 0.30 = K17,700.

Therefore, the net tax liability for the taxpayer with 1 dependent is K17,700.