CAS3701
ASSIGNMENT 11 2024
QUESTION 1
1. BACKGROUND
LearnCo. Limited (LearnCo.) is a top training provider that offers skills
development training solutions to businesses and government institutions in
South Africa. The company is based in Gauteng, South Africa and has a 30 June
202...
1. BACKGROUND
LearnCo. Limited (LearnCo.) is a top training provider that offers skills
development training solutions to businesses and government institutions in
South Africa. The company is based in Gauteng, South Africa and has a 30 June
2024 year-end.
LearnCo. offers a wide variety of courses in health and safety, leadership and
managerial skills, occupational health and even on emerging technologies like
machine learning, robotics, coding and artificial intelligence. The company
conducts the training at the client’s workplace premises. LearnCo. Employs 250
facilitators permanently. The facilitators come from a diverse range of fields in
line with the courses offered by the company. The facilitators spend majority of
their time travelling to clients throughout the country and consequently,
LearnCo. incurs a high amount of expenditure related to travel claims.
You have recently been appointed as the Financial Manager (FM) of LearnCo.
The Chief Financial Officer
(CFO) is orientating you about the company and its payroll system. The payroll
system is outlined below.
a) Discuss, with reference to the Income Tax Act and Tax Administration Act,
whether the five non-facilitator employees must be registered as taxpayers.
In line with the provisions of the Income Tax Act, 58 of 1962, and the Tax Administration
Act, 28 of 2011, all employees earning taxable income in South Africa must be
registered for tax purposes. According to the Income Tax Act, a taxpayer is defined as
any individual who earns income classified as taxable, including wages and salaries.
While Section 10 of the Income Tax Act allows for certain tax exemptions, salaries
exceeding specific thresholds are subject to taxation. The five non-facilitator
employees of LearnCo., earning R15,000 per month, have an annual gross income of
R180,000, which surpasses the tax threshold for individuals under 65, set at R95,750
for the 2024 tax year. As a result, these employees are required to pay tax on this
income.
The Tax Administration Act, under Section 67, stipulates that all individuals earning
taxable income must be registered as taxpayers. Furthermore, Section 69 of the Act
obliges employers to submit accurate payroll information to the South African Revenue
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