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Calculate the monthly instalment, cash price excluding VAT, and total extra cost for a rent-to-own solar system, given specific payment options.
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2.2.1)
Identify the monthly instalment from the table.
The table for "OPTION 1: RENT-TO-OWN" states "Pay for 7 years at R1 549 p/m".
The monthly instalment is .2.2.2)
Identify the cash price including VAT.
From "OPTION 2: CASH PRICE", the price is R78 200 (incl. VAT).
Calculate the cash price excluding VAT.
Assuming a standard VAT rate of 15%.
The cash price of the home solar system unit, excluding VAT, is .
2.2.3)
Calculate the total cost of the rent-to-own option including the buy-out.
Number of months = 7 years 12 months/year = 84 months.
Total monthly payments = R1 549/month 84 months = R129 916.
Total rent-to-own cost = Total monthly payments + Initiation fee + Buy-out after rental period
Total rent-to-own cost = R129 916 + R782 + R7 820
Total rent-to-own cost = R138 518.Calculate the extra amount Mieecke has to pay compared to buying for cash.
The cash price (incl. VAT) is R78 200.
Extra amount = Total rent-to-own cost - Cash price (incl. VAT)
Extra amount = R138 518 - R78 200
Extra amount = R60 318.
The extra amount Mieecke has to pay is .2.3.1)
Calculate Mieecke's annual taxable income.
Mieecke's monthly taxable income is R39 275,85.
Annual taxable income = R39 275,85 12 = R471 310,20.Identify the tax bracket.
(Assuming ANNEXURE A refers to the South African tax tables for individuals 2023/2024, which are:
1 - 237 100: 18%
237 101 - 370 500: R42 678 + 26% of amount over R237 100
370 501 - 512 800: R77 362 + 31% of amount over R370 500
512 801 - 673 000: R121 475 + 36% of amount over R512 800
...)
Mieecke's annual taxable income of R471 310,20 falls into the bracket of R370 501 - R512 800.2.3.2)
Calculate the tax based on the identified bracket.
For the R370 501 - R512 800 bracket, the tax is R77 362 + 31% of the amount over R370 500.
Tax = R77 362 + 0,31 (R471 310,20 - R370 500)
Tax = R77 362 + 0,31 R100 810,20
Tax = R77 362 + R31 251,162
Tax = R108 613,162.Subtract the primary rebate.
Mieecke is 45 years old, so she qualifies for the primary rebate.
The primary rebate for 2023/2024 is R17 235.
Annual tax payable = Tax - Primary rebate
Annual tax payable = R108 613,162 - R17 235
Annual tax payable = R91 378,162.
Rounding to two decimal places, the annual tax payable is .
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