DSM CPA REVIEW B4 -Public Finance & Taxation & C4 – Advanced Taxation CPA (T) DAVID D KIWIA

REVIEW QUESTIONS
QUESTION ONE
a) Assume you are given the following information below:
Sales/Purchases VAT exclusive
(Tshs.)
Sales of water 680,000
Importation of standard rated services 12,000,000
Transportation of cows by a VAT registered person 150,000
Sale of maps to a secondary school 400,000
Sales of mosquito coils 800,000
Purchase of postage stamps 30,000
Purchase of taxable goods 25,000,000
Sales to Uganda (exports) 15,000,000
Purchase of water 300,000
Retail taxable sales 56,000,000
Purchase of eggs 200,000
Electricity bill 350,000
Payment of salaries 25,000,000
Purchase of alcohol for employees 3,000,000
REQUIRED:
Compute the input tax using the standard rate method. (5 marks)

b) Timbwilitimbwili Ltd owns a quarry. It extracts stone from this quarry and sells the stone
to Mchapakazi Ltd for TZS 25 million plus VAT.
Mchapakazi Ltd converts all the stone into paving slabs and sells these slabs to Sasakazi
Ltd for TZS 45 million, plus VAT.
Sasakazi Ltd owns and runs a garden centre, where one third of the slabs are sold at TZS.65
million plus VAT to the general public in Tanzania and the remaining part is sold to Kenya
for a total of TZS 15 million, plus VAT.
REQUIRED:

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Kiwia, David D. CPA-T, BAF, MFA-OG, PhD - Finance (IP) kiwiadavid09@gmail.com +255 716 734 577
DSM CPA REVIEW B4 -Public Finance & Taxation & C4 – Advanced Taxation CPA (T) DAVID D KIWIA

Show how VAT is charged and collected at each stage of this process.
(10 marks)

QUESTION TWO

a) State the current registration thresholds for VAT purposes as per VAT Act 2014 (2 marks)
b) JONGO Traders is a VAT registered trader dealing with building materials. During the
month of September 2015, they were able to furnish the following information in the VAT
return for the said month;
TZS
Imports (at cost including CIF) 30,000,000
Exempt sales 64,800,000
Exempt supplies (purchases) 38,880,000
Expenses (all taxable) 20,520,000
Local purchases 70,570,800
Taxable gross takings 259,200,000
Note: All taxable items are VAT exclusive and where applicable, use VAT import duty
and excise duty rates as 18%, 15% and 10% respectively.
REQUIRED:
(i) State the due date for lodging VAT return. (1 mark)
(ii) With reference to the Value Added Tax Act 2014, calculate the amount of VAT
payable or refundable by or to JONGO Traders for the month of September 2015.
(12 marks)
(Total: 15 marks)
QUESTION THREE

Assume that in your normal routine checks to the taxable traders submissions you come across the
following information related to purely merchandising entity that deals in duo supplies. These
transactions relate to the month of March 2016.
(i) Purchased 50 bags of rice for TZS.5,000,000.
(ii) Sold 48 bags of rice for TZS.6,700,000.
(iii) Paid a total of TZS.1,416,000 to a taxable person as the rice transportation costs.

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Kiwia, David D. CPA-T, BAF, MFA-OG, PhD - Finance (IP) kiwiadavid09@gmail.com +255 716 734 577
DSM CPA REVIEW B4 -Public Finance & Taxation & C4 – Advanced Taxation CPA (T) DAVID D KIWIA

(iv) Sold 10 cartons of exercise books and papers for TZS.2,124,000 to the school in
the neighbourhood.
(v) Sold 6 cartons of NIDO canned milk for a total of TZS.8,260,000.
(vi) Purchased 15 cartons of dinner sets at TZS.59,000 each.
(vii) Paid TZS.9,440,000 for purchasing 80 bags of sugar from the whole seller.
(viii) Sold 70 bags of sugar to various customers for TZS.10,620,000.
(ix) Paid TZS.350,000, TZS.750,000 and TZS.80,000 as VAT on tax consultancy,
auditing fees and telephone services respectively.
(x) Paid TZS.200,000 and TZS.120,000 as VAT on accommodation and laundry
services respectively for his potential customer from Arusha, who was on the
assigned business trip.
(xi) Imported a massey ferguson tractor valued at TZS.65,500,000 and the clearing
agent (taxable person) charged him TZS.3,540,000 for all logistics.
Note: All values are tax inclusive unless specified otherwise.

REQUIRED:
Determine the deductible input tax that can be allowed for a claim to the Commissioner
General using both apportionment methods as provided in a VAT law.
(15 marks)

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Kiwia, David D. CPA-T, BAF, MFA-OG, PhD - Finance (IP) kiwiadavid09@gmail.com +255 716 734 577