Maxmin Ltd. is a company incorporated in Kenya and owns 80% of the ordinary share capital ofRed Ltd. which is also incorporated in Kenya.

Required:

(a)         Taxable income and tax chargeable thereon for Maxmin Ltd. for its accounting period ending 30 September 2001.                                                                                                    (12 marks)

(b)        Assuming that Maxmin Ltd.’s tax liability for the year ending 30 September 2000 was sh.6,400,000, show the dates and amounts of tax instalments to be paid for the tax liability you have computed in (a) above.                                                                                                          (6 marks)

(c)         Briefly comment on the taxation of royalties for both residents and non-residents in your country.

                                                                                                                                    (2 marks)

                                                                                                                        (Total: 20 marks)