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2. Briefly describe the different categories of taxpayers in Ethiopia. 3. What are the differences between advalorem and specific duty? 4. Describe the different types of tax structure. 5. Directions: Below is a list of the six economic activities by tax payers.Decide which of the activities are categorized as tax avoidance and which ones as tax evasion. a. suppose a taxpayer's total income exceeds the maximum tax-free amount, then he hasto pay the tax on such excess amount. But if he invests the excess amount in any ofthe approved schemes for which there is a relief in the tax law, he can save on taxaltogether. b. an individualsells his let out house property (long-term capital asset) for Birr.2,00,000 making a capital gain of Birr 60, 000, This capital gain would normally betaxed. But, if he invests the sale proceeds in a particular manner stipulated by law, heneed not pay any tax. c divorcing the wife on paper so that her income is not added together with husband'sincome. d. A trader makes a sale for Birr.20, 000 and does not account it, in his books undersales. An individual lends his money of Birr.50, 000 to another person at 20% interest perannum and does not include this income in his total income. f Under-invoicing of sales and inflation of purchases. 6. Explain the tax minimization methods. List down the characteristics of good tax system. What are the obligations of taxpayers? e. 7. 8. Part ll: Problems 1. If the salary of ari employee is 2,000 Birr and the tax Rate 15% and deduttions thstruction Caleutate the Income tax Iricome Tax (1.000 Bitr x 19%1 Pecord the pi

2. Briefly describe the different categories of taxpayers in Ethiopia. 3. What are the differences between advalorem and specific duty? 4. Describe the different types of tax structure. 5. Directions: Below is a list of the six economic activities by tax payers.Decide which of the activities are categorized as tax avoidance and which ones as tax evasion. a. suppose a taxpayer's total income exceeds the maximum tax-free amount, then he hasto pay the tax on such excess amount. But if he invests the excess amount in any ofthe approved schemes for which there is a relief in the tax law, he can save on taxaltogether. b. an individualsells his let out house property (long-term capital asset) for Birr.2,00,000 making a capital gain of Birr 60, 000, This capital gain would normally betaxed. But, if he invests the sale proceeds in a particular manner stipulated by law, heneed not pay any tax. c divorcing the wife on paper so that her income is not added together with husband'sincome. d. A trader makes a sale for Birr.20, 000 and does not account it, in his books undersales. An individual lends his money of Birr.50, 000 to another person at 20% interest perannum and does not include this income in his total income. f Under-invoicing of sales and inflation of purchases. 6. Explain the tax minimization methods. List down the characteristics of good tax system. What are the obligations of taxpayers? e. 7. 8. Part ll: Problems 1. If the salary of ari employee is 2,000 Birr and the tax Rate 15% and deduttions thstruction Caleutate the Income tax Iricome Tax (1.000 Bitr x 19%1 Pecord the pi

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. List down the category of employees Wi 2. Briefly describe the different categories of taxpayers in Ethiopia. 3. What are the differences between advalorem and specific duty? 4. Describe the different types of tax structure. 5. Directions: Below is a list of the six economic activities by tax payers.Decide which of the activities are categorized as tax avoidance and which ones as tax evasion. a. suppose a taxpayer's total income exceeds the maximum tax-free amount, then he hasto pay the tax on such excess amount. But if he invests the excess amount in any ofthe approved schemes for which there is a relief in the tax law, he can save on taxaltogether. b. an individualsells his let out house property (long-term capital asset) for Birr.2,00,000 making a capital gain of Birr 60, 000, This capital gain would normally betaxed. But, if he invests the sale proceeds in a particular manner stipulated by law, heneed not pay any tax. c divorcing the wife on paper so that her income is not added together with husband'sincome. d. A trader makes a sale for Birr.20, 000 and does not account it, in his books undersales. An individual lends his money of Birr.50, 000 to another person at 20% interest perannum and does not include this income in his total income. f. Under-invoicing of sales and inflation of purchases. 6. Explain the tax minimization methods. List down the characteristics of good tax system. What are the obligations of taxpayers? 7. Part ll: Problems i, f the salary of an etmployee Is 2,000 Birr and the tax Rate = 15% and deductions 142 thstruction a Caleutate the Income tax tritome fax (2.000 Bitrx19%) 6 Pecord the paymet
Transcribed Image Text:1. List down the category of employees Wi 2. Briefly describe the different categories of taxpayers in Ethiopia. 3. What are the differences between advalorem and specific duty? 4. Describe the different types of tax structure. 5. Directions: Below is a list of the six economic activities by tax payers.Decide which of the activities are categorized as tax avoidance and which ones as tax evasion. a. suppose a taxpayer's total income exceeds the maximum tax-free amount, then he hasto pay the tax on such excess amount. But if he invests the excess amount in any ofthe approved schemes for which there is a relief in the tax law, he can save on taxaltogether. b. an individualsells his let out house property (long-term capital asset) for Birr.2,00,000 making a capital gain of Birr 60, 000, This capital gain would normally betaxed. But, if he invests the sale proceeds in a particular manner stipulated by law, heneed not pay any tax. c divorcing the wife on paper so that her income is not added together with husband'sincome. d. A trader makes a sale for Birr.20, 000 and does not account it, in his books undersales. An individual lends his money of Birr.50, 000 to another person at 20% interest perannum and does not include this income in his total income. f. Under-invoicing of sales and inflation of purchases. 6. Explain the tax minimization methods. List down the characteristics of good tax system. What are the obligations of taxpayers? 7. Part ll: Problems i, f the salary of an etmployee Is 2,000 Birr and the tax Rate = 15% and deductions 142 thstruction a Caleutate the Income tax tritome fax (2.000 Bitrx19%) 6 Pecord the paymet
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