CHINHOYI UNIVERSITY OF TECHNOLOGY

GROUP 5 ASSIGNMENT

NAME REGISTRATION NUMBER

SYLVESTER T GUNDUMURE C19141912P

FAITH ZHOU C19138388J

CHARITY NDLOVU C19136521T

MILICENT MTOMBA C19138449U

NYARAI S MBENGO C19140015W

MONALLISA GUZHA C19138639M

ETHEL S MOYO C19139177F

CRAIG CHIFAMBA c19139879x

TAWANDA KAKOWA c19139550w

ORRIN T SITHOLE C19140280c

NYASHA MUTUMBWA C19139865X

LINDIWE T MLAMBO C19138499L

MODULE NAME : ADVANCED TAXATION

LEVEL : 4:1

DUE DATE : 09/06/2023

PART A

Full name – CUT Dairy Production and pastures processing project

Ownership Structure

CUT dairy being classified as a project under the university, first and
foremost falls under the Ministry of Tertiary Education and Higher Learning.
It is a project that is registered under a pseudo-entity named CUT PLATZ
(employer) which they are working on changing since they are in the process
of registering as an employer themselves.

Products and market

CUT Dairy farm has a herd of 105 cattle and of these, 42 are dairy cattle.
The feed given to the cattle consists of calf starter, calf grower, heifer meal
and silage. The first three are outsourced from local suppliers and silage is
obtained from the farm. Silage is cut in summer and used in the dry season.
Cows are milked twice every day and they produce an average of 350l (8.4l)
per cow each day. The milking process is done by an automatic milking
machine. There are two types of these machines that is the 48 pointer
machine and the 2 pointer machine. In the event that both machines are not
working, they resort to hand milking. After clinical tests to test if the milk
has no infections or bacteria, the non-infected milk is sold to the community
members, CUT hotel, CUT canteen and the processing unit. Unprocessed
milk is currently being sold at 1000 RTGS per bottle. The processing unit
further processes the milk into milk products like yoghurt and cheese.
Currently the driving costs that they have are the vaccination costs, milking
(in case of hand milking where milkers are paid) and packaging.

MISSION- Is to produce and market high quality milk in sufficient quantity

to provide a good standard of living for the community

OBJECTIVES

 production of safe, quality milk from healthy animals under generally

acceptable conditions.
 Providing fresh & pure dairy products to our consumers everyday

KEY BUSINESS
PART B

Number of employees – 16

Lower range Upper range Male Female Total

18 20 1 0 1

21 25 4 0 4

26 30 4 0 4

31 35 2 1 2

36 40 0 1 1

41 45 1 1 2

46 50 0 1 1

51 55 0 0 0

56 60 0 0 0

61 65 1 0 1

Total 13 3 16

GRADING SCHEDULE WAGES AGREEMENT; USD

EFFECTIVE 1ST NOVEMBER 2022

A1 62

A2 66

A3 73

B1 79

B2 84
 B3 90

B4 97

B5 105

C1 114

C2 123

According to ZIMRA the tax-free threshold for the month is $91,666.67 for
ZWL, so taking into consideration the data below, all the employees are
eligible for PAYE thus making the employer liable to withholding it and
remitting it to ZIMRA. However, CUT dairy is not registered an employer and
is under CUT Platz which is under the university, the university salaries
department is responsible for the employees’ salaries and their employee
taxes by extension. The employer is required to remit 20% (according to the
tax table) of individual salaries to ZIMRA since every employee, except
employee 3 who is exempt due to tax credits applied to him, are under the
tax bracket of $90,666.67 - $320,000.00, which is supposed to be paid by
the 10th of the month following salary deductions
In conclusion, the entity should strive to register as an employer and handle
their own tax and salary objectives w`hich they are currently unable to do
due to low profit

Part C

Being a dairy project, their main sources of income are milk sales

Allowable Deductions are restocking allowance if they wish to restock

because of drought or epidemic diseases and they are allowed to deduct 50%
cost of livestock purchased, Sinking of boreholes and wells and Fencing
which has 100% allowable deduction

Corporate tax credit : Employee tax credit granted on 1 employee aged 65

shown on the list of employees.

Withholding tax: They are not withholding any tax because they are just a
subsidiary which is operating under a parent and the withholding tax is
found in the consolidated books but not Cut Dairy.

Part D

They have no Capital Gains Tax because they are not selling any assets.

Part E

Cut Dairy does not pay Value added tax because milk is a common good
hence it is zero rated. However since Cut Dairy is registered under Cut
Platz, the input tax on the goods they buy is considered in the consolidated
books of CUT as a whole.