Public Finance and Taxation

 

HARAMAYA UNIVERSITY

COLLEGE OF CONTINUING AND DISTANCE EDUCATION

DEPARTEMENT OF ACCOUNTING AND FINANCE

DISTANCE ASSIGNMENT FOR THE COURSE

PUBLIC FINANCE AND TAXATION

Prepared By: Takele Teshome                                                                              

Part I: Multiple Choice

1.      XYZ enterprise, unincorporated business has reported a taxable income of birr 32,000 at the tax year ending Sene 30, 2005. How much will be the amount of business income tax?

A)   32,000              B) 11,400              C) 5,180              D) None

2.      Which one of the following is not the characteristics of VAT

A)   It is general tax      B) It is consumption tax    C) It is a broad based tax           

D) None

3.      What is Alex’s gross income if he has the following: Salary = $78,000; Dividends = $4,000; interest on government bonds = $2,000; a gain of $14,000 on a stock sale and a $4,000 loss on a small sole proprietorship that he owns.


A)    Br78,000            

B)    Br84,000            

C)    Br92,000            

D)    96,000

E)     None of the above

 



4.      Which of the following is not the method of tax evasion

A)    Omission to report taxable income

B)    Opening accounts under dummy names

C)    Deduction of business expenses as business expenses

D)    Omission to report several incomes from irregular sources

5.      Borne by the final consumer but collected at each stage of production and distribution chain?

A)    Value added tax.

B)    Capital transfer tax

C)    Excise duties

D)    Export duties.

6.      Which of the following statement is not correct about indirect tax

A)   Indirect tax is a tax that the burden may not necessarily be borne by the assessed

B)    Indirect taxes can be shifted to other person

C)    in the case of an indirect tax, the impact and incidence of tax fall on different persons

D)   all indirect taxes are borne by the buyers

E)    all except D

F)     none of the above

7.      Which of the following is a direct tax?

A)   Import duty

B)    Excise duty

C)    Value added tax

D)   Petroleum profit tax

E)    Export duty

8.      ____________ is the act of escaping from the tax liability by using the available loop-holes of the tax laws

A)   Tax delinquent

B)    Tax evasion

C)    Tax fraud

D)   Tax avoidance

9.      Administered by  ERCA and Regional Revenue Bureaus

A)   Employment income tax

B)     Value Added Tax

C)    Excise Tax

D)   Turnover Tax

10.  Income tax that will be payable on gains obtained from sale or gift

A)    Income from casual rental of property

B)    Capital gains tax

C)    Income from rendering of technical services

D)    Royalties

11.  Which of the following statement is correct about turn over tax

A)   Turnover tax is direct tax imposed on the turnover or sales value of goods and services.

B)    turnover tax would be payable on goods sold and services rendered by persons  registered for Value Added Tax

C)    It is levied on locally supplied goods and rendered services on taxable turnover of transactions by taxable persons not registered for VAT.

D)   All except B

E)    All of the above

12.  Which of the following are not causes of tax evasion?

A)    low rates of taxation

B)    Multiplicity of tax laws

C)    Complexity of tax laws

D)    All of the above

13.  One of the following is not true about tax evasion:

A)    It increase the burden of honest tax payers

B)    It can be remedied by increasing the tax rate

C)    It leads to creation of unaccountability

D)    All of the above

14.  Which of the following one  is an intermediate process

A)   Impact

B)    Incident

C)    Shifting

D)   None of the above

15.  The stamp duty would be paid on:

A)   awards, before or at the time of issuance of the award

B)    contracts or agreements, before or at time of signature

C)     leases or sub-leases, before or at the time of signature

D)   memorandum and articles of association, before or at the time of registration

E)    All of the above

16.  An indirect tax imposed on the activities of imports and exports of   goods and service is:

A)    Sales tax

B)    Custom duty tax

C)    Excise tax

D)    Turnover tax

Part II: Work out and short Answer Types

Harar beer factory produce 10,000 bottles of beer and sold the total bottles of beer to Adey beer wholesalers for birr 7 per bottle. Adey sold 5000 bottles of beer for my Café and 5000 bottles of beer for Yedi restaurant for birr9 per bottle. The retailer My Café and Yedi restaurant sold the whole bottles of beer to their customers for birr 13 per bottle.

Required:

 Calculate the value added tax on each stage in case of Ethiopian standard rate of value added tax 

2.      What it mean capital gain tax

Write the method of tax evasion at least 8

Write  the Minimum requirement to be category tax payer of A, B and C

Briefly explain the types of public debt