THE UNIVERSITY OF DODOMA
COLLEGE OF BUSINESS AND ECONOMICS
DERPARTMENT OF ACCOUNTING AND FINANCE
COURSE NAME; PUBLIC FINANCE AND TAXATION
COURSE CODE; AF 332
COURSE INSTRUCTOR: MR. DAVID MWAKAPALA
NATURE OF WORK; INDIVIDUAL ASSIGNMENT
SUBMISSION DATE: 29th June, 2022
S/N NAME REG. NUMBER PROGRAM SIGN
1 ABDALLAH M. JUMA T/UDOM/2019/03307 BBA
QUESTION.
ABC Ltd was provisionally assessed to tax of shs.5, 850,000 on the 15th April 2011 for the 2011
year of income, after having failed to furnish such a return despite having been required to do so
by the Commissioner. The company’s twelve months accounting period normally runs from 1st
September of each Calendar year
On 1st December 2011 the Commissioner served the Company with notice requiring it to furnish
the regular return of income for the year 2010 within 40 days of that date
The company paid the full taxes on the provisional return for the year 2011 on 15th June 2011.
However, it furnished the final return for the year on the 20th may 2012, which declared an
income attracting tax of TZS. 12,000,000
On 30th July 2012 Commissioner made an assessment on the Company for the year 2011 of
TZS. 26,540,000
Required:
On the basis of ITA 2004 provisions, calculate the tax payable by the Company (including the
penalties) for the year of income 20101 (Ignore section 100 interest in respect of the provisional
taxes)
SOLUTION;
Establishment of due dates
SOLUTION:
Due date of first installation: 30th November 2010
Due date of second installation: 28th February 2011
Due date of third installation: 31st May 2011
Due date of forth installation: 30th August 2011
Due date of final return: 28th February 2012
Tax liability = Shs. 5,850,000.
Since there are no changes in computation of instalments payment, then;
Amount of tax on each installment.
A−B
Installment payment = ,
C
Where by A- Total amount of tax to be paid
B-Amount of tax paid
C- Number of installments
5,850,000−0
Installment payment =
4
Installment payment =1, 462, 5000.
Therefore, the amount of tax to be paid on each installment is 1, 462, 5000.TZS
Amount of tax adjusted.
Actual tax = 26, 540, 000 X 30%
=7, 962, 000
Actual – Estimated.
7, 962, 000- 5, 850, 000 = 2, 112, 000.
Tax to be paid during submission of final return is 2, 112, 000.
PENALTIES.
Penalty for late submission of provisional return.
Due date: 31|11|2010.
Submission: 15/04/2011
Duration: 5 months
(2.5% x P x n) OR (15CPxn) whichever is greater.
(2.5% x 5, 850, 000 x 5) = 731,250, OR 15 x 15000 x 5 =1,125,000
Therefore, penalty for late submission of provisional return is shs. 1,125, 000.
Penalty for late submission of final return.
Due date: 28|2|2012.
Submission: 20|5|2012.
Duration (n): 3 months.
2.5% x (7, 962, 000 – 5, 850, 000) x 3 OR (15 x 15,000 x 3)
158, 400 OR 675,000. Whichever is greater.
Therefore, penalty for late submission of final return is shs. 675,000.
Interest on underestimation.
Due date of first installation: 30th November 2010
Due date of final return: 28th February 2012
Duration (n): 15 months.
Testing underestimation = Estimated tax
Actual tax
5850000
= 100% =73.5% hence is below 80%
7,962,000
Then, from;
r
I = P ((1 + ) n – 1) where by P = 2, 112, 000, r = 14% and, n = 15
12
0.14
= 2, 112, 000, ((1 + ) ^15 – 1) = 401, 364. 7758.
12
Therefore, Interest from underestimation is 401, 364. 7758.
Total taxable amount is equal to summation of all instalment payment + Penalties + Interests
which is shs. 10, 163,364.78.
