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- 20 Marks
CSMCE – APR 2023 – L2 – Q6 – Methods for Customer Retention in Banks
Discuss five methods used by banks to retain customers.
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- 20 Marks
CSMCE – APR 2023 – L2 – Q5 – Product Positioning and Criteria
Define product positioning and discuss three criteria for effective positioning.
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- 20 Marks
CSMCE – APR 2023 – L2 – Q4 – Reasons Why Selling is Important in Banking
List and discuss four reasons why selling is important in banking.
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- 20 Marks
CSMCE – APR 2023 – L2 – Q2 – Short Notes on Cross Selling and Marketing Concept
Write short notes on cross selling and the marketing concept.
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- 20 Marks
SMM – APR 2024 – L4 – Q2 – Factors for Selecting a West African Market under AfCFTA
Write a paper explaining five factors with examples for a multinational bank to consider before selecting a West African market to enter, leveraging the AfCFTA initiative.
Question
In your role as Head of Business Development of a multinational Bank planning to enter the West Africa market to take advantage of the African Continental Free Trade Area (ACFTA) initiative, your Managing Director has asked you to write a paper to Management. Explain, with examples, five (5) factors the bank should take into consideration before selecting a particular market in West Africa.
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- 25 Marks
QMDM – APR 2024 – L2 – Q6 – Rural Bank Investment Proposals NPV
The management of a Rural Bank must decide between two investment proposals using Net Discounted Value (NPV) calculations at a 14% discount rate, explain the term, compute NPVs, and advise on selection.
Question
The Management of a Rural Bank must decide between two proposals, on the basis of the following information:
| Proposal | Investment Now | Net Cash Inflow at the End of | 1991 | 1992 | 1993 |
|---|---|---|---|---|---|
| A | GHS 80,000 | GHS 95,400 | GHS 39,400 | GHS 12,000 | |
| B | GHS 100,000 | GHS 35,000 | GHS 58,000 | GHS 80,000 |
Assume that on Projects of this type of the company can earn 14 percent per annum. (a) Explain briefly the term Net Discount Value in relation to the projects. (b) Calculate the Net Discounted Value of Proposal A. (c) Calculate the Net Discounted Value of Proposal B. (d) Using the values in (a) and (b), advise Management regarding the proposal that should be selected.
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- Tags: Decision Making, Discounted Cash Flow, Investment Appraisal, Net Present Value, NPV, proposals, rural bank
- Level: Level 2
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- 25 Marks
QMDM – APR 2024 – L2 – Q5 – Normal Distribution in Insurance Policy Payments
Using normal distribution for policyholders' lifetimes to calculate probabilities of receiving payments at specific ages in an insurance policy.
Question
An Actuary in an insurance company formulates insurance policies that will be both profitable and marketable. For a particular policy, the lifetimes of the policyholders follow a normal distribution with a mean of 66.20 years and standard deviation of 4.4 years. One of the options with this policy is to receive a payment following the $65^{\mathrm{h}$ birthday and a payment every five years thereafter. Let $X$ be the age at death (in years) of a policyholder (a) Draw the graph of the distribution of $X$ showing clearly the key decision numbers i.e. 66.2 years, 4.4years, 65years, 70years, 75years. (b) Determine the (i) percentage of policyholders who will receive at least one payment using the option above. (ii) percentage of policyholders who will receive two or more payments. (iii) percentage of policyholders who will receive exactly two payments.
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- 20 Marks
STP – Feb 2018 – L2 – Q1 – Duty Drawback
Explain "drawback" under Customs Act 2015 and circumstances for goods deemed exported for drawback.
Question
a) In recent times the export business community has increasingly expressed concern about the issue of duty drawback management by the Ghana Revenue Authority (GRA), particularly undue delays and non-payment of duty drawback claims as accrued over the years.
As an expert tax consultant, you have been invited by the Ghana National Chamber of Commerce for a technical meeting with representatives of the business community on the duty drawback regime.
You are required to prepare a brief paper for discussion at the meeting covering the following areas:
i) An explanation of the term “drawback” as prescribed under the provisions of the Customs Act, 2015 (Act 891), including the two different categories of duty drawback that may be paid by the Commissioner-General.
ii. Under what circumstances will goods be deemed to have been exported for drawback purposes as prescribed under Act 891?
b) Corncob Industries Ltd. a company based in the Central Region of Ghana which processes agricultural products is contemplating diversifying its product lines to take advantage of an identified market potential for a particular maize-based cereal. This will require:
- Retrofitting one of their production machines which will enhance its value and performance by about 75%.
- Repairs to the equipment used for packaging the products. This will enhance its value by approximately 10%.
- Servicing of a component of the sterilization unit which is still under the manufacturer’s warranty.
Management of the company has concluded discussions with the manufacturer of the machinery, equipment and sterilization unit based in France to undertake the retrofitting, repairs and servicing, if Corncob Industries Ltd. can have the items shipped to their factory in Milan, Italy for the purpose.
Alternatively, the manufacturer’s technicians may be brought over to Ghana with the necessary materials to undertake the retrofitting and repairs at the factory premises of Corncob Industries Ltd. Management of Corncob Ind. Ltd. is not certain of the Customs implications of shipping the items out to Italy for the works, which will take four weeks and subsequently re-importing the processed items into the country.
Required:
With reference to the Customs Act, 2015 (Act 891), explain to Management of Corncob Industries Ltd. details of the customs procedure for re-importation of goods after outward processing and the related liability to customs duty, with respect to the following issues:
i. condition under which the outward processing procedure may be used.
ii. period for discharge of the outward processing procedure.
iii. import duty liability on the goods when re-imported into Ghana after processing abroad.
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- Tags: Customs Act, Duty Drawback, Export Procedures, Ghana Revenue Authority, Indirect Taxes
- Level: Level 2
- Topic: Strategic Indirect Tax Management
- Series: FEBRUARY 2018
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- 15 Marks
STP – Feb 2020 – L2 – Q5 – Anti-Avoidance Provisions
Identify and discuss three anti-avoidance provisions in the Income Tax Act, 2015 (Act 896) and their limitations on tax planning.
Question
Although tax planners have the liberty to devise schemes which reduce the tax liability of their clients, the Income Tax Act, 2015 (Act 896) contains provisions which limit tax planning schemes.
Required:
Identify any three (3) anti-avoidance provisions in Act 896 and discuss how each of these provisions places a limitation on the ability of a person to engage in tax planning.
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- 22 Marks
STP – Feb 2020 – L2 – Q4 – Business Entity Tax Implications
Advise on tax implications of establishing a company, partnership, or sole proprietorship and identify which offers the least tax exposure for an investor.
Question
As a renowned tax consultant, a potential investor in the real estate sector in Ghana is seeking your expert opinion on the tax implications of establishing a company, a partnership or a sole proprietorship and which form of the business organisations gives the least tax exposure for an investor.
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- 20 Marks
STP – Aug 2020 – L2 – Q5 – Tax Incentives for Manufacturing
Discuss tax incentives for a chocolate manufacturing plant in Ghana and the impact of factory location on these incentives.
Question
The Swiss-Ghanaian Chamber of Commerce is organising a fair for some Swiss investors who intend to establish a chocolate manufacturing plant in Ghana. The investors intend to manufacture chocolates for the domestic and international markets.
Required
As an expert in strategic tax planning, the Chamber has invited you to speak on the tax incentives available for such investments and whether the location of the factory would have an impact on the tax incentives the investors can enjoy.
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- 20 Marks
STP – Aug 2020 – L2 – Q4 – Debt vs Equity Financing
Discuss whether debt financing offers more tax benefits than equity financing for companies, with references to Ghanaian tax law.
Question
Some scholars argue that from a strategic tax planning perspective, debt financing provides more tax benefits to companies than equity financing for investors.
Required
With the aid of appropriate authorities, discuss the accuracy or otherwise of the above assertion.
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- 20 Marks
STP – Aug 2020 – L2 – Q3 – Ownership Change Tax Implications
Discuss income tax implications for Obibini Ghana Limited if an investor acquires 51% of its shares.
Question
Obibini Ghana Limited is a wholly owned Ghanaian real estate company. The basis period of the company ends on 31st December each year. In order to raise additional capital to expand its activities, the company is looking for an investor who would acquire at least 51% of the shares of the company. The managers of the company are engaged in negotiations with a potential investor and the parties expect the transaction to be completed on 31st January 2020. The financial statements of the company revealed that the company made a loss of GH₵2,500,000 for the period ended 31st December 2019. The company also had financial cost of GH₵100,000.00
The company also has a parcel of land located at Abokobi which the company purchased three years ago at the cost of GH₵100,000.00. The current value of the land is GH₵500,000.00
Required
The managers of the Obibini Ghana are seeking your opinion on the following:
i. the income tax implications for the company if an investor acquires 51% of the company’s shares.
ii. The tax planning opportunities available which could reduce the income tax exposure of company if an investor acquires 51% of the company’s shares.
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- Tags: Income Tax Act, Ownership Change, Share Acquisition, Tax Mitigation, Tax Planning
- Level: Level 2
- Topic: Foundations of Strategic Tax Planning
- Series: AUGUST 2020
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- 20 Marks
STP – Aug 2020 – L2 – Q2 – Corporate Restructuring
Restructure Mr. Kofi Opoku’s companies to reduce tax exposure and provide cheaper financing for Speed Transport Ghana Limited.
Question
Mr. Kofi Opoku is the direct shareholder of Unique Farms Ghana Limited and Speed Transport Ghana Limited. Unique Farms is engaged in tree crop farming and the company harvested the tree crops for the first time in 2019. In April, 2020, he received a copy of the audited financial statements of the two companies.
An analysis of the audited financial statements of the companies revealed the Unique Farms Ghana Limited is more profitable of the two companies. Speed Transport Ghana Limited however requires a lot of money for its operating activities and it mostly resorts to borrowing from financial institutions to meet its expenditure requirements. The high borrowing costs was affecting the profitability of the company.
Mr. Opoku also noticed that tax exposure on his investments is not ideal. Mr. Kofi Opoku has been informed that you are an expert in strategic tax planning.
Required
You are required to help Mr. Kofi Opoku restructure his companies in a manner that would provide a cheaper financing option for Speed Transport Ghana Limited and reduce his overall tax exposure on the investments.
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- 20 Marks
STP – Aug 2020 – L2 – Q1 – Tax Planning vs. Tax Avoidance
Discuss distinction between tax planning and tax avoidance under Ghanaian tax law with examples and references.
Question
The Council of the Chartered Institute of Taxation, Ghana (CITG) has invited you to speak at a Continuous Development Program (CPD) on the topic “The distinction between tax planning schemes and tax avoidance arrangements under Ghanaian tax laws”.
In the letter of invitation, the Council indicated that you are to submit a detailed write-up of your presentation.
Required
With the aid of appropriate examples and specific references to Ghanaian tax law provisions, write in sufficient detail, the content of your presentation.
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- 20 Marks
STP – Aug 2018 – L2 – Q5 – Taxation of Specialized Business Sectors
Discuss tax consequences of establishing a cattle farm in Ghana and the impact of location on incentives.
Question
(a). The Chief Executive Officer (CEO) of Dana, a meat processing company based in the United Arab Emirates is exploring the possibility of expanding the operations of the company to Ghana. The CEO intends to establish a cattle farm and an ultra-modern meat processing which would process the meat for export to the Middle East. His initial inquiries revealed that Ghana has tax incentives for investors who seek to establish businesses which produce items for export.
Required: As the preferred tax advisor, provide an opinion on the income tax consequences of establishing a cattle farm indicating whether the location of the farm impacts on the tax incentives available to an investor.
(b). Based on your knowledge of the Free Zone Act, 1995 (Act 504) state and discuss five (5) tax incentives which the investor can obtain if he registers the meat processing factory as a Free Zone Enterprise.
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- Tags: Export, Free Zone Act, Meat Processing, Tax Incentives, Withholding Tax
- Level: Level 2
- Topic: Tax Incentives
- Series: AUG 2018
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- 25 Marks
STP – Feb 2020 – L2 – Q3 – Taxation of Capital Transactions
Advise Ravid Ghana Ltd on tax implications of selling land and office building for GHS200,000.
Question
Ravid Ghana Ltd is a software development company with its registered office located at North Kaneshie in the Greater-Accra Region of Ghana. In March 2016 the company purchased a parcel of land at Oyarifa at a cost of GH¢25,000.00. The company spent GH¢5,000 to construct a fence wall around the property and to complete title registration processes at the Lands Commission. In May 2017, the company also purchased an office building at Madina valued at GH¢100,000.00 as well as a Toyota Hilux pick-up valued at GH¢100,000.00. In February 2018, the board of directors of the company decided to dispose of the parcel of land purchased in March 2016 and the office building in order to raise money to finance the purchase of strategic assets. The company engaged the services of a valuer to determine the market value of the land located at Oyarifa. The company paid the valuer GH¢5,000.00 for services rendered. In August 2019, the company sold the parcel of land and the office building in a single transaction for GH¢200,000.00. At the time of the sale, the market value of the land was GH¢50,000.00 and the office building was GH¢150,000.00. The written down value of the building was GH¢70,000.00 at the time of the sale.
Required: Advise the company on the income tax implications of the realization of the assets.
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