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- 20 Marks
MFS – APR 2024 – L2 – Q7 – Objectives of Macro-Economic Policy and Their Conflicts
Outline the objectives of macro-economic policy, identify their practical incompatibilities or major conflicts, and recommend a useful procedure for satisfactory attainment.
Question
Assume you have been delegated by the Chief Executive Officer of a Financial Institution to represent her at a seminar where she is to deliver a speech on the topic: “Though the objectives of Macro-Economic Policy are logically consistent, they are unattainable simultaneously”. Outline such objectives and identify their practical incompatibility or major conflicts. Recommend a useful procedure towards a satisfactory attainment of the goals of Macro-Economic Policy.
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- Tags: attainment, Conflicts, logical consistency, macro-economic policy, Objectives, procedure, unattainability
- Level: Level 2
- Topic: Aims of economic policy, Economic policy
- Series: APR 2024
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- 20 Marks
MFS – APR 2024 – L2 – Q5 – Panic Withdrawals and Deposit Mobilization in Ghana Banking Sector
Identify measures to address panic withdrawals and outline previous measures for enhancing deposit mobilization in Ghana's banking sector amid recent challenges.
Question
The challenges that confronted the Banking Sector in recent times have led to what has been termed ‘panic withdrawals’.
a) Identify four (4) measures the banks could use to address the effects of the ‘panic withdrawals.
b) Outline six (6) measures that the banks previously relied on to enhance Deposit Mobilization.
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- 20 Marks
MFS – APR 2024 – L2 – Q4 – Structure of Traditional/Informal Credit Delivery System in Ghana
Discuss the structure of Ghana's traditional/informal credit delivery system as encouraged by the government to supplement formal intermediaries.
Question
As a means of raising additional funds to supplement the efforts of the formal Financial Intermediaries, the Government of Ghana encourages the operation of Non-Institutionalised or Traditional Credit Delivery System. Discuss the structure of the Traditional/Informal Credit Delivery System of Ghana.
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- 20 Marks
MFS – APR 2024 – L2 – Q3 – Financial Intermediation and Profitability Enhancement
Describe financial intermediation as a business activity and consider ways to enhance profitability of a financial intermediary with reference to revenue streams and cost components, while maintaining caution.
Question
(a.) How would you describe Financial Intermediation as a form of business activity? (b.) With reference to its revenue streams and cost components, consider how Profitability of a Financial Intermediary could be enhanced within the ambit of caution.
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- 20 Marks
MFS – APR 2024 – L2 – Q2 – Demand-Pull and Cost-Push Inflation
Identify and explain the ingredients and forms of demand-pull inflation and cost-push inflation.
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- 20 Marks
MFS – APR 2024 – L2 – Q1 – Medium of Exchange and Opportunity Cost of Liquidity
Explain the statement that in a modern economy, a medium of exchange needs only value-in-exchange, not value-in-use, with examples; discuss the opportunity cost of liquidity concept with reference to cash and interest-bearing financial assets.
Question
(A) In a Modern Economy, a Medium of Exchange needs not necessarily possess value in-use: it is sufficient for it to possess only value-in-exchange. Explain this statement with relevant examples. (B) The Opportunity Cost of liquidity is the interest that the holder of a Financial Asset sacrifices. Discuss this concept with reference to Cash and Interest-B Bearing Financial Assets.
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CSMCE – APRIL 2024 – L2 – Q7 – Bank’s Channel of Distribution and Importance of Physical Location
Define a bank's channel of distribution and list and discuss three reasons why physical location is important in banking.
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- Tags: Banking, Channel of Distribution, Customer Access, Definition, importance, Physical Location, Trust Building
- Level: Level 2
- Topic: Channel of Distribution, Definition, Physical Location
- Series: APR 2024
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- 20 Marks
ATP – Feb 2016 – L2 – Q2 – Tax Accounting Principles
Explain tax provisions for cash-basis and accrual-basis accounting under Internal Revenue Act, 2000 (Act 592).
Question
The application of tax accounting principles and taxation rules for determining income has been made flexible by Section 25(1) of the Internal Revenue Act, 2000 (Act 592), as amended which states that “Subject to this Act, for the purposes of ascertaining a person’s income accruing or derived during a basis period, the timing of inclusions and deductions shall be made according to generally accepted accounting principles.”
You are required to explain to a prospective investor the tax provisions regarding cash-basis accounting and accrual-basis accounting in the light of the above-mentioned provision of Act 592.
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- Tags: Accrual Basis, Cash Basis, Income Tax, Tax Accounting, Tax Compliance
- Level: Level 2
- Topic: Tax Accounting Principles
- Series: FEB 2016
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- 20 Marks
ATP – Feb 2016 – L2 – Q1 – VAT Refund Procedure
Advise on procedure and conditions for a diamond company to claim VAT refund under Value Added Tax Act, 2013.
Question
(a). As a tax consultant, you have been contacted for tax advice by a diamond producing company, which has just began producing diamond in Tarkwa for both local and foreign markets. The Finance Director of the company has informed you that the company has accumulated excess (input) VAT to the tune of GHC8.56 million and would like to claim it from the Ghana Revenue Authority to boost the company’s cash flows from operations.
You are required to advise the company on the procedure and conditions that must be satisfied before the Ghana Revenue Authority may refund the excess VAT to the company under the Value Added Tax Act, 2013 (Act 870), as amended.
(b). Section 57 of the Value Added Tax Act, 2013 (Act 870), as amended has made provision for a designated account known as the Value Added Tax Refund Account.
You are required to identify the purpose/use of that account.
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- Tags: Ghana Revenue Authority, Refund Account, Tax Compliance, Value Added Tax Act, VAT
- Level: Level 2
- Topic: Indirect Taxes
- Series: FEB 2016
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- 20 Marks
ATP – Aug 2015 – L2 – Q5 – Tax Compliance Framework
List three circumstances where filing a Return of Income is not required under the Internal Revenue Act.
Question
(a). Mr. Tanko Alhassan is the Head of Customer Service Department of Saabhot Company Limited. The following information is extracted from his Tax Return for 2014 year of assessment.
| GH¢ | |
|---|---|
| Basic salary (2014) | 144,000.00 |
| Responsibility allowance | 3,600.00 |
| Professional allowance | 2,500.00 |
| House-Help allowance | 2,800.00 |
| Entertainment allowance | 4,500.00 |
Mr. Tanko Alhassan was paid a bonus of GH¢45,800.00 by his employer on 27th February 2015 in respect of his performance for the year 2014. He uses his own private car for official duties for which he was given a monthly reimbursable fuel allowance of GH¢1,000.00. He is a divorcee with two children who attends Christ the King Junior High School in Accra. As part of the company’s policy to support brilliant children, each of Mr. Tanko Alhassan’s children are on an annual educational bursary of GH¢3,000.00.
He contributes 5.5% of his salary to the Social Security Scheme and an additional 5% to a Staff Provident Fund Scheme under the National Pensions Act, 2008 (Act 766). His employer, Saabhot Company Limited contributes on his behalf 13% and 5% of his salary to the Social Security Scheme and the Staff Provident Fund Scheme respectively.
You are required to compute the tax liability of Mr. Tanko Alhassan for the 2014 year of assessment.
(b). Under section 72 of the Internal Revenue Act, 2000 (Act 592) as amended, persons are generally required to furnish Returns of Income to the Ghana Revenue Authority. Except as may be required by the Commissioner-General by notice in writing that a person files a return, the Internal Revenue Act, 2000 (Act 592) as amended, provides exception from filing of Return of Income.
You are required to indicate only three circumstances where the filing of a Return of Income is not required under the Internal Revenue Act, 2000 (Act 592) as amended.
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- Tags: Exemptions, Income Tax, Non-resident, Tax Returns, Withholding Tax
- Level: Level 2
- Topic: Tax Compliance Framework
- Series: AUG 2015
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- 20 Marks
ATP – Aug 2015 – L2 – Q4 – Income Tax Computation
Compute chargeable income for partners of Zee & Associates for 2012-2014, including capital allowances.
Question
Ace, Brace and Crate have been in partnership since 2006 trading as Zee & Associates dealing in cement and preparing accounts to December 31 each year. Their Partnership Agreement showed that they share profits in the ratio 5:4:3 respectively.
The written-down values of the assets used in their operations as at 31st December, 2011 were as follows:
| GH¢ | |
|---|---|
| Office Equipment | 148,000.00 |
| Pick–up vehicles | 95,000.00 |
| Saloon vehicles | 80,000.00 |
Brace resigned from Zee & Associates on 2nd January 2013 and on his exit, Ace and Crate continued the business agreeing to share profits in the ratio 2:1 respectively.
The partnership Firm acquired the following additional assets:
a) A building for office annex costing GH¢430,000.00 on 4th October, 2013.
b) One Toyota Camry for GH¢85,000.00 on 26th March 2012
c) One Toyota Land Cruiser Prado at a cost of GH¢188,000.00 on 3rd July, 2013
Some of the office equipment were sold on 15th June, 2013 for GH¢35,000.00.
The Firm’s adjusted profits for tax purposes but before grant of capital allowance were as follows:
| Year to 31/12/2012 | GH¢315,000.00 |
|---|---|
| Year to 31/12/2013 | GH¢298,000.00 |
| Year to 31/12/2014 | GH¢328,000.00 |
You are required to compute the chargeable income, if any, of each partner for the relevant years of assessment on the assumption that no other incomes accrued to any of the partners.
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- 20 Marks
ATP – Aug 2015 – L2 – Q3 – Income Tax Computation
Advise on tax implications of loans from Zenith Bank and Bank of America for Zabta Company.
Question
(a). Zabta Company Limited has been in operation in Ghana for less than two years. The Managing Director is not comfortable with the Head of Finance with regard to the manner in which he handles tax issues of the company and has therefore sought your advice on the tax implications of the following intended transactions by the company: i) Borrowing from Zenith Bank (Ghana) Limited of an amount of GHS2.50 million at an interest rate of 28% per annum and a commitment fee of 1% flat. ii) Borrowing from Bank of America (in the USA) of an amount of US$4.00 million at an interest rate of 9% per annum and a commitment fee of 0.3% flat.
As a newly appointed tax consultant of the company, you are required to advise the Managing Director (in a memorandum) of the tax implications of the above transactions.
(b). You have been recently appointed an Advisor responsible for Finance and Tax at the office of the Chief of Staff of Ghana. The Chief of Staff has requested you for a reasoned write-up of the taxability status of the Vice-President of the Republic of Ghana under the Internal Revenue Act, 2000 (Act 592) as amended.
You are required to explain the taxability status of the Vice-President of the Republic of Ghana under the provisions of the Internal Revenue Act, 2000 (Act 592), as amended with respect to income tax, capital gains tax, and gift tax.
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- Tags: Borrowing, Ghana tax laws, Interest Deduction, VAT, Withholding Tax
- Level: Level 2
- Topic: Income Tax Computation
- Series: AUG 2015
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- 20 Marks
ATP – Aug 2015 – L2 – Q2 – Employment Income Taxation
List conditions for tax-exempt passage allowances for expatriates under Ghana tax laws.
Question
(a). As a tax consultant, you have been contacted by a prospective investor who is planning his staff budget for expatriates and would like to know if there are any qualifying conditions under which allowances or payments made to an employee (expatriate) by an employer for a passage to or from Ghana in respect of that person’s appointment or termination of employment will not be taxed in the hand of that person (employee) under the tax laws of Ghana.
You are required to indicate the three qualifying conditions available under the Internal Revenue Act, 2000 (Act 592) as amended.
(b). Under what circumstances will a person who owns a chargeable asset be deemed to have realized the asset in accordance with the provisions of the Internal Revenue Act, 2000 (Act 592) as amended. Are there any exceptions?
(c). Jones Lamptey completed construction of a building at a cost of GHS105,000.00 in June 2011 at Madina. In April 2014, he had undertaken repairs to the building amounting to GHS3,600.00 as a result of cracks and leakages to the roof. In June 2014, he also paid an amount of GHS800 for fire insurance on the building to State Insurance Company of Ghana. In September 2014, Jones sold the house to Abeiku Martey for GHS150,900.00 and paid sales commission of 3% of the sales proceed to Dumsor Real Estate Agency, who arranged and facilitated the transaction. In November 2014, Jones used GHS130,000.00 of the sales proceed of the building at Madina to purchase another building at Lakeside Estate because he wanted to live in a gated community.
You are required to determine capital gains, if any, accruing to Jones Lamptey from these transactions.
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- Tags: Expatriate Allowances, Ghana tax laws, Income Tax, Passage Costs
- Level: Level 2
- Topic: Employment Income Taxation
- Series: AUG 2015
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- 20 Marks
ATP – Aug 2015 – L2 – Q1 – Income Tax Computation
Advise on tax implications of church income and pastoral allowances under Ghana tax laws.
Question
(a). The Pastoral Council of the Church of Soul Resurrection has approached you as a tax consultant for tax advice on the operations of the Church, including allowances paid to the Pastors and other Reverend Ministers. You are informed that the income of the Church is from donations, offertories and tithes from its congregants which are used towards charitable causes in the community and the upkeep of the Church. You are also informed that the Church was registered as a company limited by guarantee under the Companies Act, 1963 (Act 179) as amended.
You are required to write a memorandum (since you also double as a member of the Pastoral Council) to the Chairman of the Pastoral Council of the Church of Soul Resurrection to explain the tax implications of the income of the Church and the allowances paid to the Pastors and other Reverend Ministers. Please note that your advice should be based on the provisions of the tax laws of Ghana.
(b). Under Section 20 of the Value Added Tax Act, 2013 (Act 870), “supply of goods” means an arrangement under which the owner of goods parts with possession of the goods, by way of sale, barter, lease, transfer, exchange, gift or similar disposition; and
“supply of services” means a supply which is not a supply of goods or money, and in the nature of the performance of services for another person; the making available of a facility or advantage; or tolerating a situation or refraining from doing an activity.”
With reference to the above quotation, you are required to indicate the activities that do not constitute supply of goods or services under the Value Added Tax Act, 2013 (Act 870).
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- Tags: Allowances, Church Income, Exemptions, Ghana tax laws, Income Tax
- Level: Level 2
- Topic: Income Tax Computation
- Series: AUG 2015
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- 20 Marks
POT – Mar 2025 – L2 – Q5 – Withholding Tax
State five payments exempt from withholding taxes in Ghana.
Question
a) The Managing Director of Kantorse LTD is worried about the amount of withholding tax deductions the company suffers when the company receives payment for the supply of goods to some customers. He has heard that some payments could be exempted from withholding taxes.
Required: State FIVE payments that are exempt from withholding taxes.
b) State FIVE responsibilities of a VAT Withholding Agent.
c) The Ghana Revenue Authority (GRA) has implemented an online tax filing system that allows taxpayers to submit their tax returns through the GRA portal. This system is part of the broader digitalization effort aimed at enhancing tax compliance and administration in Ghana.
Required: i) Discuss FOUR benefits of using the GRA online tax filing system for both taxpayers and tax administrators.
ii) Identify TWO challenges that taxpayers may face when using the online tax filing system and recommend possible solutions.
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- Tags: Exempt payments, Income Tax Act, Tax Compliance, Withholding Tax
- Level: Level 2
- Topic: Digital Taxation, Tax Administration
- Series: MAR 2025
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- 20 Marks
POT – Mar 2025 – L2 – Q4- Partnership Taxation
Compute Nmani Pharmacy’s chargeable income for 2023.
Question
a) Three pharmacy students, Abanga, Banzey and Chambas who completed the Tamale Technical University have teamed up to undertake a business venture in the pharmaceutical sector under a Trading Name Nmani Pharmacy. They agreed to share profit and losses in the ratio 3:2:1 for Abanga, Banzey and Chambas respectively. The details provided below relate to the business financial performance for the year 2023.
| Details | GH¢ |
|---|---|
| Sales | 663,400 |
| Cost of goods sold: | |
| Opening inventory | 150,000 |
| Purchases | 300,000 |
| 450,000 | |
| Closing inventory | (120,000) |
| 330,000 | |
| Gross profit | 333,400 |
| Less expenses: | |
| Staff cost | 102,000 |
| Business promotions | 58,100 |
| Depreciation | 98,200 |
| Electricity and water | 53,000 |
| Expired drugs | 12,100 |
| Donation | 78,000 |
| Rent and rates | 15,000 |
| Sundry expenses | 50,000 |
| Vehicle running cost | 63,000 |
| (529,400) | |
| Net profit | 134,000 |
| Tax paid | (15,200) |
| Net profit after tax | 118,800 |
Additional Information:
- Staff cost includes monthly stipend allocations to the aged parents of the partners totaling GH¢18,000.
- All three Partners are taking care of their aged parents who are more than 60 years.
- Business promotions include lunch expenses of the partners amounting to GH¢21,200.
- Donations include funeral donation made during the funeral of the mother of the Vice Chancellor of the Tamale Technical University amounting to GH¢20,000.
- Sundry expenses include fine amounting to GH¢32,000 imposed by the Food and Drugs Authority for failure to remove some expired drugs from shelves.
- The Partners received Withholding Tax Certificates indicating an amount of GH¢15,200 from the Binabaani European Hospital for medical consumables supplied to the hospital.
- Capital allowance has been agreed with the Ghana Revenue Authority at GH¢104,200.
Required: i) Compute the chargeable income for Nmani Pharmacy for the 2023 Year of Assessment.
(ii) Compute the net tax payable by each partner for the year 2023.
(b) In line with the provisions of the Income Tax Act, 2015 (Act 896), partnership and limited liability companies in Ghana are taxed in accordance with their residency status in a year of assessment.
Required: State the criteria for the determination of the residency status of partnership and limited liability companies.
(c) All over the world, countries have introduced policies to guarantee income for their hard-working workforce who may go on retirement to enable them to live meaningful lives after retirement. Ghana’s pension system aims to provide personal financial security for employees in their retirement years.
Required: Describe the current pension system in Ghana.
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- 20 Marks
POT – Mar 2025 – L2 – Q3 – Taxation of Individuals
Determine Selassi Afolabi’s chargeable income for 2023.
Question
a) Selassi Afolabi was employed as the Personnel Manager of Tano North District Assembly on 1 March 2021 on salary scale of GH¢72,000, which is expected to increase by GH¢4,000 annually to a maximum of GH¢84,000. As part of his conditions of employment, he is entitled to the following: i) He has a fully furnished accommodation. ii) He has a vehicle, fuel and driver for official use only. iii) Risk allowance of GH¢2,000 a month. iv) Inconvenience allowance of GH¢1,500 a month. v) Professional allowance of GH¢2,500 a month. vi) He was paid a bonus of GH¢16,000. vii) He had the services of a gardener who receives monthly salary of GH¢800, paid by the employer. viii) He is divorced with three children who are schooling in government approved schools in Ghana. ix) He contributes 5.5% of his salary to the Social Security Scheme. x) He contributes 8% of his salary to an approved Provident Fund and his employers also contributes 10% on his behalf to the Provident Fund. xi) He received a net dividend of GH¢12,800 in 2023 from shares owned in a resident company. xii) He received a director’s fee of GH¢16,000 net of 20% WHT in 2023 from being a Board member in a private company.
Required: Determine his chargeable income for the 2023 year of assessment.
b) Adwoa Ntowbea is an investor in several companies in Ghana and abroad. Below are details of ordinary share dealing of Adwoa Ntowbea in Amaraaba LTD, a limited liability company in Ghana which is not listed on the Ghana Stock Exchange.
| Date | Details |
|---|---|
| 1 Jan 2023 | Bought 500 shares at GH¢11 each |
| 18 Sept 2023 | Bought 1500 shares at GH¢12 each |
| 30 Dec 2023 | Bought 800 shares at GH¢10 each |
| 19 Nov 2024 | Sold 500 shares for GH¢12 each |
Required: i) Determine the gains on the shares sold
ii) Determine the tax, if any, on the shares sold.
iii) Explain the withholding tax regime on realization of capital assets.
iv) What are the tax return requirements on realization of capital gains?
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