General Mathematics Paper 2,Nov/Dec. 2010
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Question 6

1. A man whose annual basic salary is N750, 000.00 is allowed the following tax reliefs:
Personal allowance     :           20% of annual basic salary
Wife allowance           :           N 70, 000.00
Children allowance     :           N 30, 000.00 per child up to 4 children
Dependent Relatives   :           N 100, 000.00

1. If the man has four children, calculate his taxable income.
2. If he pays tax at the rate of 35 kobo in the naira on the first N 180,000.00 taxable income and 15 kobo in the naira on the remaining taxable income, calculate his monthly tax.

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Observation

The Chief Examiner reported that this question was attempted by majority of the candidates. However, some of them did not get the full marks because they did not follow the correct procedure. Others who were able to obtain the annual tax did not divide it by twelve to obtain the monthly income tax. Candidates were expected to obtain the total tax reliefs as follows:
Total reliefs = Personal allowance + wife allowance + children allowance + dependent relative allowance = N [  x 750, 000 + 70,000 + (4 x 30, 000) + 100,000] = N (150,000 + 70,000 + 120,000 + 100,000) = N 440,000.00. Thus, the taxable income was N (750,000 – 440,000)
= N 310,000.00. The total annual tax paid by the man =  N [(  x ) + (  x )]
= N 82,500.00. The monthly tax would then be N  = N 6,875.00.