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Kbt 106: Agribusiness Taxation Question Paper

Kbt 106: Agribusiness Taxation

Course:Bachelor Of Science In Agribusiness Management

Institution: Kenyatta University question papers

Exam Year:2011

DATE: TUESDAY, 5TH APRIL 2011 TIME: 11.00 A.M. - 1.00 P.M.

INSTRUCTIONS: Answer Question ONE and any other TWO questions.

1. a)
Define agribusiness tax giving its characteristics.

(5 marks)

b)
Distinguish between the following;

(i)
Canon of flexibility and Canon of elasticity

(2 marks)

(ii)
Direct taxes and indirect taxes

(2 marks)

(iii)
Digressive tax and Regressive tax

(2 marks)

(iv)
Tax evasion and Tax avoidance

(2 marks)

(v)
Exempt supplies and Zero rated supplies

(2 marks)

Page 1 of 3

c)
Describe administration of income tax and the year of income from the point of

view of income tax in Kenya.

(5 marks)

d)
State three (3) allowable deductions form benefit income for tax purposes.

(3 marks)

e)
Discuss Tax amnesty highlighting its objective as a policy in tax administration.

(5 marks)

f)
List any six (6) incomes that are exempted from income tax.
(6 marks)

g)
Explain any three (3) purposes for which taxes are levied.
(6 marks)

2. a)
Define the Value Added Tax (V.A.T) and explain its advantages and

disadvantages as a tax in agribusiness.

(11 marks)

(b)
Differentiate explaining the purposes between Custom duties and Excise duties.

(4 marks)

3. a)
Samar Limited in Githurai started its operations in January 2005. The company

had incurred the following capital expenditure:

Kshs.
Cost of land

400,000
Cost of buildings

1,600,000
New machinery installed

1,200,000
Delivery Vans

400,000

Calculate the capital allowances due to the company for the year 2005.

(11 marks)
Page 2 of 3

(b)
Discuss balancing allowance/charge.

(4 marks)

4. a)
Mr. Ndiema is a married person. He and his wife had the following income for

the year 2005.

(i)
Mr. Ndiema
- Salary 170, 000 (P.A.Y.E sh. 25,000)
- Dividends 30,000 (Withholding tax sh. 4,500)

(ii)
Mrs. Ndiema
- She is employed as a teacher at a salary of 6,000 p.m. (P.A.Y.E sh.
2,500)
- She runs a small business. Her income from business was sh. 60,000
during the year.

Calculate the tax payable by Mr. and Mrs. Ndiema for the year ended December

2005.

(11 marks)

(b)
Write short and concise notes on wife’s income.

(4 marks)

Kbt 106: Agribusiness Taxation Question Paper

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