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MULTIMEDIA UNIVERSITY OF KENYA

FACULTY OF BUSINESS AND LAW

BACHELOR OF COMMERCE; YEAR 3- SEMESTER 1

UNIT: ADVANCED TAXATION

WANJIRU NJENGA - BUS-241-0248/2013

MBUVI LOIS NTHENYA - BUS-241-066/2012

MUTWIRI KIRIMI - BUS-241-209/2012

OMWODO R0BERT - BUS-241-0180/2013

MANG’ONG’O GREGORY - BUS-241-0202/2013

NJIRIMANI EVANS N -BUS-241-0210/2013

JUDITH OPILI - BUS-241-0193/2013

ODINDO PETER KEFA - BUS-241-0231/2013

QUESTION 1

Define and describe Custom duty, Excise duty and other miscellaneous taxes.

1) Excise Duty.

This is an inland tax on the sale or production for sale of specific goods/goods produced for sale/sold within a country. It is an indirect tax therefore lacks announcement effects and can be implemented easily without resentment.

Purposes:

* To raise revenue for the government

* Discourage production and use of harmful goods

* To control production of some specific commodities.

2) Customs Duty.

This is tax imposed on importation and exportation of goods based on CIF (Cost Insurance and Freight) of goods and other charges. Rate of customs duty depends on classification of goods. Customs documents involved include:

* Customs entry – a form filled with details of goods e.g. owner of goods, cost of goods, clearing and forwarding agents, country of origin, country of destination, VAT payable etc.

* Bill of Lading – ownership certificate of goods being transported from one country to another, e.g. airway bill.

* CRF (Clean Report of Findings) – certificate issued by a pre-shipment inspection company to confirm that goods are fit for importation and also gives the value of the goods invoiced. In case there is no purchase invoice, it is used to calculate value of duty payable.

* Purchase invoice – a document issued be sellers to the importer showing the selling price in details of the seller. In case the goods...