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Final Exam Tax

This document provides the instructions and questions for a Tax Law final exam for 4th year students at Bahir Dar University School of Law. The exam is divided into 3 sections - multiple choice questions, hypothetical case studies, and essay questions. Section I contains 5 multiple choice questions worth 3 points each. Section II contains 2 hypothetical cases worth 5 points each for a total of 20 points. Section III contains 3 essay questions worth 5 points each for a total of 15 points. The exam is closed book except for relevant legislation and lasts 120 minutes.

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Mulugeta Akalu
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12K views3 pages

Final Exam Tax

This document provides the instructions and questions for a Tax Law final exam for 4th year students at Bahir Dar University School of Law. The exam is divided into 3 sections - multiple choice questions, hypothetical case studies, and essay questions. Section I contains 5 multiple choice questions worth 3 points each. Section II contains 2 hypothetical cases worth 5 points each for a total of 20 points. Section III contains 3 essay questions worth 5 points each for a total of 15 points. The exam is closed book except for relevant legislation and lasts 120 minutes.

Uploaded by

Mulugeta Akalu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Bahir Dar University School of Law

Tax Law Final Exam for 4th year Regular Students

Department: Law Time Allowed: 120 minutes


Course Title: __Tax Law_________ Course Code: Laws-4022 Coverage: 50%
Instructor: Mulugeta Akalu
General Instructions
 This exam paper contains three question types, Choice, case and essay types.

 Examinees are required to write their ID numbers and Names

 It is a closed book exam except legislations

 Support your answers with relevant provisions when necessary


Section I: Multiple Choice; 3 Points each

1. Which of the following is not an indirect tax?


A. Sales tax, B. Custom duty C. Excise duty, D. Gift Tax
2. The term incidence of taxation refers to.....
A. Initial burden of the tax C. Final burden of the tax
B. Burden of tax on government D. None of the above
3. The following is not a characteristic of a tax.
A. It is a compulsory payment
B. Every tax involves a sacrifice by tax payer
C. There is a quid-pro-quo between the tax payer and the Government.
D. Refusal to pay tax is a punishable offence
4. Which of the following is not true?
A. In terms of progressivity VAT is not better than its predecessors
B. VAT is more revenue productive than TOT
C. RST is prone to evasion than VAT
D. None
5. Which of the following it true
A. In scheduler system, the incomes obtained by a taxpayer under a schedule are aggregated for
tax purposes
B. Schedule C Taxpayers have no obligation to keep book of account
C. Deductible expenses are those incomes which are exempted from taxability
D. None

Section II: Hypothetical Cases; 20 Points

1. Kebede runs a retail business. One of the assets he used to run the business is a house that he
uses to store and sell commodities. He bought the house at the end of 2011 E.C for 1.2 milion
birr. In 2012 and 2013 he has obtained a depreciation deduction from the house. In the
beginning of 2014 fiscal year, he sold the house for 1.6 million birr. Depreciation deduction
rate is 5 %.
A. What is the amount of income that is taxable under article 21 (5 points)
B. What is the amount of income that is taxable under article 59.( 5 Points)

2. Mark is a permanent resident of Ethiopia. He was born in Kenya and he spends most of
the year working off the coast of Somalia on an oil rig for a Chinese company. Mark has
retained his Kenyan citizenship although he has been recruited for the Chinese job in
Ethiopia and signed a contract with the company in Ethiopia. For the last four years, Marks’s
wife has lived in Ethiopia with their two children. The couple purchased a home in Ethiopia
three years ago. Mark and his wife have a joint bank account with Awash Bank and Marks’s
salary is paid directly into this account. All of the family’s other investments, including a
share portfolio that generates substantial dividend income, remain in Kenya. Mark
gets one month off from work every third month and, on these occasions, he meets with his
family either in Ethiopia or on holidays around east Africa mostly in Kenya where his
parents reside. Answer the following question based on Ethiopian tax law
a. Discuss whether Mark is regarded as a resident of Ethiopia for tax purpose, 5 points
b. If yes how his salary and investment income could be taxed? 5 points

Section III; Essay Part

1. Inheritance tax is exempted under the current income tax law. Discuss the arguments
against and in favor of exempting this type of income. 5 points
2. The Ethiopia value added tax is adopted from the European model VAT. Explain the
major drawbacks of this model VAT. 5 points
3. Compare and Contrast VAT with its predecessor other consumption taxes. 5 Points

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