Direct taxes are taxes which are imposed initially on the individual or household that is
meant to bear the burden. (e.g. income tax)
Indirect taxes are the taxes which are imposed at some other point in the system but are
meant to be shifted to whomever is supposed to be the final bearer of the burden.(sales
taxes)
Estrellah W answered the question on June 3, 2019 at 09:55
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The following expenses were incurred by Mr. Tajiri in February 2008:
- Furnishing of the houses - Sh.200,000 per house.
- Legal fees for drawing rental agreements - Sh.13.000 per agreement Valuation fee for the three houses - Sh.33,000.
- Insurance premium for the three houses for the period I February 2008 to 31 January 2009 – Sh60,000
The insurance policy for the houses was renewed on 1 February 2009 at the same rate and terms
Mr. Tajiri has provided the following additional information for years 1008 and 2009:
1. Land rates paid for 2008 amounted to Sh. 150,000 while for 2009 the amount paid was Sh.165,000
2. The cost of garbage collection per house was Sh.250 for each month that the house was occupied. The rental agreement provided that the landlord was responsible for paying this amount to the garbage collection company.
3. The three houses were served by three watchmen and one gardener who were each paid Sh.5,500 per month by the landlord This amount was increased by 11% with effect from 1 May 2009 following a directive by the government en minimum wage levels.
4. The rent for each month was collected by an estate agent on behalf of the landlord. The estate agent charged a fee equivalent to 2.5% of the rent collected.
5. Interest charged on a loan used to develop the three house amounted to Sh.660,000 in 2008 and Sh624,000 in 2009.
6. In December 2008, the- landlord repainted the houses at a cost of Sh.60,000 and repaired a side road leading to the houses at a cost of Sh. 100,000.
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8. In March 2009, Sh.160,000 was incurred by the landlord to repair a leaking roof in one of the houses.
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Assume that the watchmen and gardener are not allocated to a particular house but serve the three houses as a unit.
Date posted: February 15, 2019. Answers (1)
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Any value added...(Solved)
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