REPUBLIC OF RWANDA
MINISTRY OF EDUCATION
KIGALI CITY
GASABO DISTRICT
DISTRICT END OF 2nd TERM 2019 EXAMINATIONS
Acc. year: 2019
TRADE: CUSTOMS AND TAX OPERATIONS
Module: Element of tax Administration and Ethics
Level: 3 CTO
Duration: 3H
Total mark: 100
Instructions:
This paper is out of 100 Marks
Cheating is prohibited
Answer all questions of section A / 55MARKS
Answer Three questions of section B /45MARKS
Write neatly and readable answers
Follow the order of questions while answering as per the questions
Section A: answers all
QUESTION NO 1
Part 1: Match the clues to the correct terms found in the answer key. Write the letter of each
term in the space before each clue.
Answer Key:
A. Taxes
B. Public goods and services
C. Revenue
D. Resources
E. Defense
Taxes shift these from the private sector to the government.
Taxes and borrowed money are two examples used by government.
Governments purchase these for the benefit of the community as a whole.
When individuals pay these, they have less money to spend on personal goods
and services.
An example of goods and services provided by our government.
Part 2
Use the pie chart below titled “Income” to complete this activity. Match the taxes to the
correct percentage they contribute to federal revenue in the answer key. Write the
letter of each percentage in the space before each of the taxes.
Answer Key:
A. 23%
B. 5% C. 30%
D. 36%
Borrowing to cover deficit
Social Security, Medicare, unemployment and other retirement taxes
Corporate income taxes
Personal income taxes
Part 3
Use the pie charts from Part 2 to answer the following questions. Indicate whether each
of the statements below is True or False. Write your answer in the space provided.
1. The largest federal outlay is for Defense.
2. Social Security, Medicare, and other retirement accounts for 37% of federal spending.
3. Personal income tax accounts for the greatest tax revenue.
4. More government dollars are spent on Law Enforcement than on Defense. _
5. Corporate Income Taxes make up 5% of federal revenue.
QUESTION NO 2
Part 1
Match the clues to the correct terms found in the answer key. Write the letter of the correct
term in the space provided.
Answer Key:
A. Ways and Means Committee
B. president
C. informal tax legislation process
D. Finance Committee
E. formal tax legislation process
The process of strict constitutional steps that a proposed tax bill must pass through
before it becomes law is called this
This occurs when individuals and interest groups express and promote their opinions
about tax legislation
Where the tax bills originate in the House of Representatives
Where the Senate reviews and often rewrites bills
Where a bill goes after it is approved by Congress; it is either signed or vetoed
Part 2
Classify the following examples as being part of the informal or formal tax legislation
process. Write the letter of the correct response in the space provided.
1. Attendance at town meetings
A. formal
B. informal
2. Circulating and signing
petitions
A. formal
B. informal
3. Presenting a bill to the full
Senate
A. formal
4. B. informal
Joining and supporting lobbying groups
A. formal
B. informal
5. Overriding a presidential veto
A. formal
B. informal
Part 3
Put the following steps of the formal tax legislation process in the correct order by
writing the number in which the event occurs in the space provided.
The compromise version of the bill is sent to both the House and the Senate for
approval.
The bill goes to the Senate, where it is reviewed and often rewritten by the
Finance Committee. The committee’s version is then presented to the full
Senate.
The tax bill is initiated in the House of Representatives and referred to the Ways
and Means Committee. When members of this committee reach agreement about
the legislation, they write a proposed law.
If the president vetoes the bill, Congress may try to override the veto with a two-
thirds vote of each house.
After the Senate approves the bill, it is sent to a joint committee of House and
Senate members, who try to arrive at a compromise version.
After Congress passes the bill, it goes to the president, who can either sign it into law
or veto it.
The bill goes to the full House, where it is debated, possibly amended, and
eventually approved.
Activity 1
Use the word list to complete the flowchart below, showing the steps taken—in
correct order— for enacting a federal tax law. Some have been filled in for you.
House/Senate Compromise bill Veto override passes
Full Senate President signs bill
President vetoes bill Veto override fails
Joint Conference Committee House Ways and Means Committee
QUESTION NO 3
Part 1
Match the descriptions to their correct key terms. Write the letters of the correct key
terms on the lines provided.
Answer Key:
A. sales tax
B. business
C. individual
D. direct
E. indirect
1. Personal income tax is paid by this type of income earner
2. A tax which cannot be shifted
3. To recover an increase in its taxes, this type of taxpayer may
increase its prices to its customers
4. A tax which can be passed on to another
5. Stores often pass along the cost of this type of state and local tax
Part 2
Indicate whether each of the statements below is True or False. Write true if the
statement is true. Write false if the statement is false. Write your answers in the space
provided.
1. A direct tax cannot be shifted to another.
2. Individual income tax is an example of a direct tax.
3. To recover business taxes, an owner cannot pass along the charges.
4. Consumers often pay some or all business taxes when they purchase
goods and services.
5. Ultimately, only a business owner pays the cost of business property tax.
Part 3
Classify each tax below as either Direct or Indirect. Write the letter of the correct choice in the
space provided.
1. Sales tax
A. direct tax
B. indirect tax
2. Personal income tax
A. direct tax
B. indirect tax
3. Personal property tax
A. direct tax
B. indirect tax
4. Business property tax
A. direct tax
B. indirect tax
5. Payroll tax
A. direct tax
B. indirect tax
SECTION B
Question4) Mr. Innocent whose gross salary was frw 450,000 per month received a loan of
15,000,000 from his employer free of interest on 1st January 2018 payable in 15 years. While
computing his salary for January 2018, the accountant remembers that he should charge interest
income tax to Innocent. The BNR interbank interest rate was 12% per annum. As an accountant
assistant, you are requested to compute tax on the loan.
Required:
a) How much is taxable income from the loan?
b) How much is that tax
Question5. a)A machine Lap top is sold at 280.000FRW plus VAT .If VAT is charged at 18% ,how
much would one pay for the machine?
b).A washing machine costs 48000FRW exclusive of VAT given that VAT is charged at
18% , how much will the machine cost including VAT?
Question6. Calculate the income tax payable by a resident individual whose annual income is frw
45000000. The employee is provided with furnished accommodation and a fuelled car for private
use. The employee has two children attending school. The employer provide an education allowances
of frw 7 200,000 a year, paid monthly
Question7. a)A company declares a final dividend of 25 FRW per share. Given that a shareholder
holds 19000 shares, calculate A: His gross dividend.
B: The withholding tax charged on the dividend at 15%
C: The net amount due
b).Mr KAREMERA has submitted information on his profit and loss account under the head of
business in RWF as given bellow
Sales 65,000,000
Opening stock 1 6,000,000
Purchases 21,000,000
Closing stock 17,000,000
Expenses 3,800,000
Non-deductible Expenses 1,300,000
Calculate a.Tax result
b. The Tax due
c.Fill RRA declaration form OF CIT
GivenProfit before tax 32,900,000
Non-deductible expenses 1,700,000
- Non-taxable incomes 2,800,0000
Other elements similar to incomes 1,835,000
Other elements similar to expenses 2,009,500
Calculate a.Tax result
b. The Tax due
Question8. List Types of Domestic Taxes and Local Governement Tax in Rwanda
Good luck!!!!!!!!!!!!!!
