Mr. Manubhai works as a sales manager with Kenya Bats Limited. The
following are his employment details for the year ended 31 December 2005.
The company pays him a salary of Sh.90,000 per month. He is a member of
the company’s pension scheme which is registered with the Commissioner for
Income Tax. He contributes five percent of his salary and company
contributes ten per cent.
He has a co-operative loan which he repays at the rate of sh.9,967 per month.
The company bought for him a car on loan and repays Sh.10,160 per month
towards the loan. Drought levy has been agreed at Sh.1,438 per month.
Mr. Manubhai lives in Nairobi and is married with two children. His Payroll
Number is FD0095/12.
Statutory deductions are: NSSF Sh.200 per month
NHIF Sh.320 per month.
Required:
(i) A well laid out statement in respect of the month of December 2005 showing
the income tax and other deductions; and net pay for Mr. Manubhai.
( 8 marks)
(ii) Would you agree that current income tax rules regarding payment of tax
discriminate against employees when compared to companies? Explain.
( 4 marks)