Mathematics questions, chapter 4

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Consumer Mathematics: Taxation

44 marks. Use Practice to check each answer as you go, or Exam to answer everything first. Show your working for Section B.

Section A: objective questions

14 marks

Choose the correct answer. Each question carries 1 mark.

Question 1

Which of the following is not a purpose of taxation?

To finance national development projects
To make every citizen pay the same amount of tax whatever the income
To discourage the buying of certain goods
To help the government stabilise the economy

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Tax is a source of revenue, a policy tool, a way of controlling the sale of some goods and a tool to stabilise the economy. It is not a purpose to charge everyone the same amount; the tax system redistributes income to reduce inequality.

For the teacher: Remembering, low difficulty, standard 4.1.1

Textbook p. 97

Question 2

Which body collects road tax in Malaysia?

Inland Revenue Board
Royal Malaysian Customs Department
Road Transport Department
Local authority

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Road tax is collected by the Road Transport Department (JPJ). The Inland Revenue Board collects income tax, Customs collects sales and service tax and the local authority collects property assessment tax.

For the teacher: Remembering, low difficulty, standard 4.1.2

Textbook p. 100

Question 3

Quit rent is a tax charged on the owner of

land
a motor vehicle
a business with sales above RM500 000
a credit card

Show answerHide answer

Quit rent is levied on land owners and collected by the State Land Office. Road tax is for vehicles; sales tax is for taxable goods; credit cards have their own service tax of RM25 a year.

For the teacher: Understanding, low difficulty, standard 4.1.2

Textbook p. 101

Question 4

Which statement about sales tax is correct?

It is charged to the consumer of every service
It is paid every month to the local authority
It is charged on land with buildings
It is charged only once on taxable goods at the stage of manufacture or import

Show answerHide answer

Sales tax is charged once on taxable goods when they are manufactured or imported. Service tax is the part that applies to services.

For the teacher: Understanding, low difficulty, standard 4.1.2

Textbook p. 102

Question 5

Encik Faiz has a total annual income of RM80 000, tax exemption of RM1 500 and tax relief of RM16 500. His chargeable income is

RM64 000
RM62 000
RM78 500
RM60 500

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80 000 − 1 500 − 16 500 = RM62 000. RM64 000 forgets the exemption; RM78 500 forgets the relief.

For the teacher: Applying, low difficulty, standard 4.1.3

Textbook p. 104

Question 6

Which describes a tax rebate?

An amount deducted from total income before tax is calculated
A donation to an approved organisation
An amount deducted from the income tax calculated
The tax deducted from salary every month

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A rebate (for example the RM400 rebate or zakat paid) is deducted from the tax. A relief is deducted from income. PCB is the monthly deduction.

For the teacher: Understanding, low difficulty, standard 4.1.3

Textbook p. 106

Question 7

A taxpayer has a chargeable income of RM42 000. Using the tax table for 2020 (RM600 on the first RM35 000, then 8%), find the income tax payable. No rebate is due.

RM1 160
RM3 360
RM560
RM1 200

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Tax = 600 + (42 000 − 35 000) × 8% = 600 + 560 = RM1 160. RM560 leaves out the base tax; RM3 360 takes 8% of the whole income.

For the teacher: Applying, low difficulty, standard 4.1.3

Textbook p. 105

Question 8

A taxpayer has a chargeable income of RM30 000 and no zakat. Using the tax table (RM150 on the first RM20 000, then 3%), find the income tax payable after the rebate.

RM450
RM350
RM0
RM50

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Tax = 150 + (30 000 − 20 000) × 3% = RM450. Chargeable income does not exceed RM35 000, so rebate RM400. 450 − 400 = RM50.

For the teacher: Applying, medium difficulty, standard 4.1.3

Textbook p. 107

Question 9

The road tax for a car of 1 801 cc to 2 000 cc is RM280 plus RM0.50 for each cc exceeding 1 800 cc. Find the road tax for a car of 1 950 cc.

RM280
RM975
RM355
RM378

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(1 950 − 1 800) × 0.50 = 75. Road tax = 280 + 75 = RM355. RM975 multiplies the full 1 950 cc by 0.50.

For the teacher: Applying, low difficulty, standard 4.1.3

Textbook p. 111

Question 10

A house can be rented out for RM800 per month. The property assessment tax rate is 6% of the annual value. How much must be paid for each half-year?

RM576
RM288
RM48
RM24

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Annual value = 800 × 12 = RM9 600. Tax = 6% × 9 600 = RM576 a year, so RM288 each half-year.

For the teacher: Applying, low difficulty, standard 4.1.3

Textbook p. 112

Question 11

A plot of land of 250 m² has a quit rent rate of RM0.28 per square metre. The quit rent payable each year is

RM70
RM7
RM892.86
RM250.28

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Quit rent = 0.28 × 250 = RM70.

For the teacher: Applying, low difficulty, standard 4.1.3

Textbook p. 112

Question 12

A hotel charges RM180 per night and 6% service tax. A guest stays for 3 nights. The service tax payable is

RM10.80
RM540
RM3.24
RM32.40

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Service tax = 180 × 3 × 6% = RM32.40. RM10.80 is the tax for one night only.

For the teacher: Applying, low difficulty, standard 4.1.3

Textbook p. 113

Question 13

Puan Nora's income tax payable is RM2 840. Each month RM200 was deducted as PCB. What happens next?

She is refunded RM440
She pays RM440 to the IRB
She pays RM2 640 to the IRB
She is refunded RM2 400

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Total PCB = 200 × 12 = RM2 400, less than RM2 840. Insufficient payment = 2 840 − 2 400 = RM440 to be paid to the IRB.

For the teacher: Analysing, medium difficulty, standard 4.1.3

Textbook p. 108

Question 14

A taxpayer leaves out some income in the ITRF, so RM1 500 of tax is undercharged. Besides a fine of RM1 000 to RM10 000, a penalty of 200% of the tax undercharged is imposed. Find the penalty.

RM1 500
RM1 000
RM3 000
RM4 500

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200% of RM1 500 = 2 × 1 500 = RM3 000. RM4 500 is the total of tax and penalty; RM1 500 is only 100%.

For the teacher: Applying, medium difficulty, standard 4.1.2

Textbook p. 100

Section B: structured questions

30 marks

Answer all questions. Show your working.

Question 15

The government collects Real Property Gains Tax (RPGT) on profit from selling land or property. Siti, a clerk for 5 years, has never reported her income because she thinks her pay is too low to be taxed.

[2 marks] (a)State two purposes of taxation.

Show answerHide answer

To provide revenue for the government to run the country and finance development [1]1
Any other: policy tool, control sales of goods or services, stabilise the economy [1]1

Tick each point you got.

[1 mark] (b)Explain one purpose of RPGT.

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To discourage excessive buying and selling of property for profit (policy tool) [1]1

Tick each point you got.

[1 mark] (c)Is Siti a responsible citizen? Give a reason.

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No, she should find out whether her income is taxable and register and report it; tax is a compulsory duty [1]1

Tick each point you got.

For the teacher: Understanding, low difficulty, standard 4.1.1

Textbook p. 98

Question 16

Encik Razak has an annual income of RM96 400, which includes allowances of RM6 400 that are tax exempted. He donated RM1 500 to a library. His total tax relief is RM21 000 and he paid zakat of RM800. Each month RM250 is deducted as PCB.

[2 marks] (a)Calculate his chargeable income.

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96 400 − 6 400 = 90 000; 90 000 − 1 500 − 21 000 [1]1
RM67 500 [1]1

Tick each point you got.

[3 marks] (b)Calculate the income tax payable. (Tax on the first RM50 000 is RM1 800; the next RM20 000 is taxed at 14%.)

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Tax on balance = (67 500 − 50 000) × 14% = RM2 450 [1]1
1 800 + 2 450 − 800 [1]1
RM3 450 [1]1

Tick each point you got.

[2 marks] (c)Does he need to pay more tax to the IRB? Explain.

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PCB = 250 × 12 = RM3 000, which is less than RM3 450 [1]1
Yes, he must pay RM450 [1]1

Tick each point you got.

For the teacher: Applying, medium difficulty, standard 4.1.3

Textbook p. 106

Question 17

In 2020 Mr Hafiz earned RM48 000 and his wife earned RM36 000. Each has relief of RM9 000 (individual) and RM5 000 (EPF and life insurance, limit RM7 000). There is no exemption or zakat. In joint assessment each relief is claimed once and the limit applies to the combined amount. Tax table: RM150 on the first RM20 000, then 3% (to RM35 000); RM600 on the first RM35 000, then 8% (to RM50 000); RM1 800 on the first RM50 000, then 14%. A rebate of RM400 is given if chargeable income does not exceed RM35 000.

[3 marks] (a)Calculate the income tax under joint assessment.

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Income 84 000; relief 9 000 + 7 000 = 16 000; chargeable income RM68 000 [1]1
1 800 + (68 000 − 50 000) × 14% = 1 800 + 2 520 [1]1
RM4 320 (no rebate) [1]1

Tick each point you got.

[4 marks] (b)Calculate the total income tax under separate assessment.

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Husband: 48 000 − 14 000 = RM34 000; 150 + 14 000 × 3% = RM570 [1]1
570 − 400 = RM170 [1]1
Wife: 36 000 − 14 000 = RM22 000; 150 + 2 000 × 3% = RM210, less rebate RM400 gives RM0 [1]1
Total RM170 [1]1

Tick each point you got.

[1 mark] (c)Which assessment is more suitable? Give a reason.

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Separate assessment, since RM170 is much less than RM4 320 [1]1

Tick each point you got.

For the teacher: Analysing, high difficulty, standard 4.1.3

Textbook p. 110

Question 18

A home used 720 kWh of electricity in a month. Usage above 600 kWh is charged 6% service tax. The bill is: first 200 kWh at RM0.218; next 100 kWh at RM0.334; next 300 kWh at RM0.516; remaining 120 kWh at RM0.546.

[1 mark] (a)Calculate the charge for the last 120 kWh.

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120 × 0.546 = RM65.52 [1]1

Tick each point you got.

[1 mark] (b)Calculate the amount which is not subject to service tax.

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43.60 + 33.40 + 154.80 = RM231.80 [1]1

Tick each point you got.

[2 marks] (c)Calculate the service tax and the total bill.

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65.52 × 6% = RM3.93 [1]1
231.80 + 65.52 + 3.93 = RM301.25 [1]1

Tick each point you got.

For the teacher: Analysing, low difficulty, standard 4.1.4

Textbook p. 117

Question 19

Puan Mei Ling has a chargeable income of RM31 500. She paid zakat of RM300 in the year. A friend says that she will get a refund because her rebates exceed the tax.

[1 mark] (a)Find her total tax rebate.

Show answerHide answer

400 + 300 = RM700 [1]1

Tick each point you got.

[2 marks] (b)Calculate the income tax before rebate and the income tax payable. (RM150 on the first RM20 000, then 3%.)

Show answerHide answer

150 + (31 500 − 20 000) × 3% = RM495 [1]1
495 − 700 < 0, so payable RM0 [1]1

Tick each point you got.

[1 mark] (c)Is the friend correct? Explain.

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No, the excess rebate is not refunded; she simply pays RM0 [1]1

Tick each point you got.

For the teacher: Evaluating, medium difficulty, standard 4.1.4

Textbook p. 115

Question 20

A friend has just started his first job and does not know how income tax works.

[3 marks] (a)Write a short note of three pieces of advice about filing income tax, stating the deadline, record keeping and how tax can be paid.

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Deadline: 30 April (30 June if he has a business) for the previous year's income [1]1
Keep receipts and documents for 7 years [1]1
Pay in a lump sum or through monthly tax deduction (PCB); compare PCB with tax payable [1]1

Tick each point you got.

For the teacher: Creating, medium difficulty, standard 4.1.2

Textbook p. 99

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