NATIONAL OPEN UNIVERSITY OF NIGERIA
14-16 AHMADU BELLO WAY, VICTORIA ISLAND, LAGOS
SCHOOL OF MANAGEMENT SCIENCES
MARCH/APRIL 2014 EXAMINATION
COURSE CODE: BHM 417 COURSE UNITS: 2
COURSE TITLE: TAXATION
TIME ALLOWED: 2HRS 30 MINS
Instructions: 1. Attempt question Number one (1) and any other two (2).
2. Question number 1 is compulsory and carries 30 marks, while the other
questions carry 20 marks each
3. Present all your points in coherent and orderly manner
A) CFP, an entity resident in Country X, had an accounting profit for the year ended 31 December 2011 of $860,000. The accounting profit was after charging depreciation of $42,000 and amortisation of development costs of $15,000.
CFP was entitled to a tax depreciation allowance of $51,000 for the year to 31 December 2011.
What is CFP’s tax payable for the year ended 31 December 2011 ?
B) Mr. Maxwell who engages in tomatoes selling business had regularly made up his annual accounts to 31st August each year. He permanently ceased his business on 31st December, 2004.
His adjusted profits for the last four years were as follows:
Year ended 31/08/02 N300,000
Year ended 31/08/03 N200,000
Year ended 31/08/04 N150,000
Period to 31/1/04 N70,000
You are required to compute the assessable income for the relevant years
A: Define the term tax and taxation. 10 marks
B. Briefly describe the benefit of tax to Nigeria as a country. 5marks
c. Enumerate the characteristic the makes a good tax system. 5marks
“Recently, some tax analysts have proposed a tax break that would allow people to save unlimited amounts of money in retirement saving plans where interest income is allowed to accumulate tax free. The effect of such a plan would be to raise the saving rate”. Discuss 20marks
“The fact that cigarette sales do not change much when cigarette taxes are increased allows us to conclude that cigarette companies bear most of the burden of the cigarette tax”. Discuss 20marks
A. In a country like Nigeria, list the income, which are non-taxable income by the state. 5marks
B. With relevant provision, state which income from employment is deemed to be derived in Nigeria. 10marks
C. Explain the term “chargeable asset” 5marks
For the 2015 – till date past questions for this course CLICK HERE
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