Benefits in kind

TAX – Nov 2014 – L2 – Q4 – Personal Income Tax

Calculate annual and monthly tax liabilities for Mr. David Olaleye.

Question

Mr. David Olaleye retired from the Ministry of Water Resources, Ogun State, on 31 December 2012 and was paid a gratuity of ₦4,000,000. He secured employment with OLAK Limited on 1 January 2013 as a Senior Marketing Manager, with a salary of ₦8,400,000 per annum. He is married with a wife and six children.

His records at the end of his first year of employment revealed:

He was given an official car with a market value of ₦2,500,000.
The company pays ₦820,000 annually for his official accommodation.
He has a life assurance policy with Okonkwo Assurance Plc. (Sum assured: ₦480,000; Monthly premium: ₦4,200).
He contributes ₦20,000 monthly to an approved pension scheme.
He spent ₦17,000 annually for the upkeep of his two aged parents.
He contributes ₦15,000 per month to the National Health Insurance Fund and ₦20,000 per month to the National Housing Fund.

Requirements:

a. Compute the annual and monthly tax liabilities of Mr. David Olaleye for the relevant tax year. (12 Marks)
b. Explain what constitutes Gross Emoluments under the Personal Income Tax (Amendment) Act 2011. (3 Marks)
c. List the benefits of applying computer models in tax administration. (5 Marks)

Answer

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Tags: Benefits in kind, Gross Emoluments, Personal income tax, Tax computation
Level: Level 2

Topic: Personal Income Tax
Series: NOV 2014

TAX – May 2024 – L2 – SA – Q1 – Personal Income Tax (PIT)

Determine Mr. Ola Alao’s chargeable income and tax payable with respect to benefits and allowances.

Question

Mr. Ola Alao works as the manager of XYZ Limited located at Ikeja, Lagos. He provided the following income details for the 2021 assessment year:

Gross monthly income: N204,000
Bonuses:
- May 29, 2021: N92,000
- September 24, 2021: N162,000
Workshop allowance (10 days at N45,000 per day)
Luncheon vouchers: N120,000 (non-assignable)
Official vehicle (N8,000,000, exclusive use)
Night guard: N480,000, and domestic staff: N360,000 (both fully paid by the company)
Transfer allowance: N2,000,000 (for relocation to Port-Harcourt office on November 1, 2021)
Rented apartment paid by the company: N600,000 per annum
Pension contribution: 8% of salary, life insurance premium: N20,000/month
National health insurance and housing fund contributions: N35,000 and N40,000 monthly

Required:
a. For the 2021 assessment year,
i. Identify the relevant tax authority of Mr. Ola Alao. (2 Marks)
ii. Compute the chargeable income of Mr. Alao. (19 Marks)
iii. Compute the income tax payable by Mr. Alao. (5 Marks)
b. Differentiate between a contract of employment and contract for employment. (4 Marks)

Answer

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Tags: Benefits in kind, Employment Income, Income Computation, Tax Reliefs
Level: Level 2

Topic: Personal Income Tax
Series: MAY 2024

AT – NOV 2018 – L3 – Q2C – Business income – Corporate income tax, Tax administration in Ghana

Calculate taxable income and tax payable for an individual with multiple income sources, and identify tax compliance issues for a private practice.

Question

c) Kate Oppong, a physically challenged, works for the Ministry of Health as an eye surgeon and optician based at Komfo Anokye Teaching hospital in Kumasi. She dedicates most of her free time to her private practice, as well as writing books and articles for the Ghana Medical Journal. Kate is also part of the medical team for the local NGO and Sight Restoration, which is involved in cataract surgery for the disadvantaged members of society in remote rural areas.

Kate’s private practice is located in Kumasi and has a staff complement of six employees who are all full time workers. Kate only attends to the patients at her private practice strictly by appointment and her patient base has been steadily growing due to her experience and dedication.

In terms of her service contract with Sight Restoration, Kate is required to participate in all the cataract operations scheduled for the year. Her service contract is for a year, subject to renewal as and when donor support is available.Sight Restoration’s field staff, of which Kate is one, are paid a predetermined monthly salary plus an attendance allowance which is paid only after each cataract operation. The field staff is also entitled to a one-off representation allowance for participating in scheduled seminars.

Kate Oppong’s earnings and deductions for the year ended 31 December 2017 were:

Notes:

This amount is part repayment of the interest free personal loan of GH¢12,000 advanced to Kate on 1 January, 2017, repayable over two years. The Bank of Ghana interest rate for the year ended 31 December 2017 was constant at 20%.
This amount was fully expended towards the travelling costs for Kate and her minor son for his medical treatment in South Africa.
No employees tax (PAYE) or corporate income tax was paid in respect of the amounts paid to the employees of the private practice (including Kate) or the profits from the practice. This was because in Kate’s opinion her operations were ‘private’ and as such not subject to tax and also because she believed that she was already contributing her fair tax share from her other two employers.
Kate is a single parent and takes care of her single son in the senior high school. She also takes full responsibility of her aged mother.

Required:

i) State the Ghana Revenue Authority’s (GRA) requirements which have been breached by Kate Oppong and consequences of the breach based on the information given in note (3). (5 marks)

ii) Calculate the taxable income of and income tax payable by Kate Oppong for the year ended 31 December 2017. Note: All computations should be rounded to a whole cedi. (9 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Benefits in kind, Corporate Tax, Employment Income, NGO income, PAYE, Personal income tax, Private practice income, Tax Compliance
Level: Level 3

Topic: Business income - Corporate income tax, Tax administration in Ghana
Series: NOV 2018

TAX – Nov 2014 – L2 – Q4 – Personal Income Tax

Calculate annual and monthly tax liabilities for Mr. David Olaleye.

Question

His records at the end of his first year of employment revealed:

He was given an official car with a market value of ₦2,500,000.
The company pays ₦820,000 annually for his official accommodation.
He has a life assurance policy with Okonkwo Assurance Plc. (Sum assured: ₦480,000; Monthly premium: ₦4,200).
He contributes ₦20,000 monthly to an approved pension scheme.
He spent ₦17,000 annually for the upkeep of his two aged parents.
He contributes ₦15,000 per month to the National Health Insurance Fund and ₦20,000 per month to the National Housing Fund.

Requirements:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Benefits in kind, Gross Emoluments, Personal income tax, Tax computation
Level: Level 2

Topic: Personal Income Tax
Series: NOV 2014

TAX – May 2024 – L2 – SA – Q1 – Personal Income Tax (PIT)

Determine Mr. Ola Alao’s chargeable income and tax payable with respect to benefits and allowances.

Question

Mr. Ola Alao works as the manager of XYZ Limited located at Ikeja, Lagos. He provided the following income details for the 2021 assessment year:

Gross monthly income: N204,000
Bonuses:
- May 29, 2021: N92,000
- September 24, 2021: N162,000
Workshop allowance (10 days at N45,000 per day)
Luncheon vouchers: N120,000 (non-assignable)
Official vehicle (N8,000,000, exclusive use)
Night guard: N480,000, and domestic staff: N360,000 (both fully paid by the company)
Transfer allowance: N2,000,000 (for relocation to Port-Harcourt office on November 1, 2021)
Rented apartment paid by the company: N600,000 per annum
Pension contribution: 8% of salary, life insurance premium: N20,000/month
National health insurance and housing fund contributions: N35,000 and N40,000 monthly

Answer

Find Related Questions by Tags, levels, etc.

Tags: Benefits in kind, Employment Income, Income Computation, Tax Reliefs
Level: Level 2

Topic: Personal Income Tax
Series: MAY 2024

AT – NOV 2018 – L3 – Q2C – Business income – Corporate income tax, Tax administration in Ghana

Calculate taxable income and tax payable for an individual with multiple income sources, and identify tax compliance issues for a private practice.

Question

Kate Oppong’s earnings and deductions for the year ended 31 December 2017 were:

Notes:

This amount is part repayment of the interest free personal loan of GH¢12,000 advanced to Kate on 1 January, 2017, repayable over two years. The Bank of Ghana interest rate for the year ended 31 December 2017 was constant at 20%.
This amount was fully expended towards the travelling costs for Kate and her minor son for his medical treatment in South Africa.
No employees tax (PAYE) or corporate income tax was paid in respect of the amounts paid to the employees of the private practice (including Kate) or the profits from the practice. This was because in Kate’s opinion her operations were ‘private’ and as such not subject to tax and also because she believed that she was already contributing her fair tax share from her other two employers.
Kate is a single parent and takes care of her single son in the senior high school. She also takes full responsibility of her aged mother.

Required:

i) State the Ghana Revenue Authority’s (GRA) requirements which have been breached by Kate Oppong and consequences of the breach based on the information given in note (3). (5 marks)

ii) Calculate the taxable income of and income tax payable by Kate Oppong for the year ended 31 December 2017. Note: All computations should be rounded to a whole cedi. (9 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Benefits in kind, Corporate Tax, Employment Income, NGO income, PAYE, Personal income tax, Private practice income, Tax Compliance
Level: Level 3

Topic: Business income - Corporate income tax, Tax administration in Ghana
Series: NOV 2018

Question Tag: Benefits in kind

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TAX – Nov 2014 – L2 – Q4 – Personal Income Tax

Calculate annual and monthly tax liabilities for Mr. David Olaleye.

TAX – May 2024 – L2 – SA – Q1 – Personal Income Tax (PIT)

Determine Mr. Ola Alao’s chargeable income and tax payable with respect to benefits and allowances.

AT – NOV 2018 – L3 – Q2C – Business income – Corporate income tax, Tax administration in Ghana

Calculate taxable income and tax payable for an individual with multiple income sources, and identify tax compliance issues for a private practice.

TAX – Nov 2014 – L2 – Q4 – Personal Income Tax

Calculate annual and monthly tax liabilities for Mr. David Olaleye.

TAX – May 2024 – L2 – SA – Q1 – Personal Income Tax (PIT)

Determine Mr. Ola Alao’s chargeable income and tax payable with respect to benefits and allowances.

AT – NOV 2018 – L3 – Q2C – Business income – Corporate income tax, Tax administration in Ghana

Calculate taxable income and tax payable for an individual with multiple income sources, and identify tax compliance issues for a private practice.

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TAX – Nov 2014 – L2 – Q4 – Personal Income Tax

Calculate annual and monthly tax liabilities for Mr. David Olaleye.

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TAX – May 2024 – L2 – SA – Q1 – Personal Income Tax (PIT)

Determine Mr. Ola Alao’s chargeable income and tax payable with respect to benefits and allowances.

You're reporting an error for "TAX – May 2024 – L2 – SA – Q1 – Personal Income Tax (PIT)"

AT – NOV 2018 – L3 – Q2C – Business income – Corporate income tax, Tax administration in Ghana

Calculate taxable income and tax payable for an individual with multiple income sources, and identify tax compliance issues for a private practice.

You're reporting an error for "AT – NOV 2018 – L3 – Q2C – Business income – Corporate income tax, Tax administration in Ghana"

TAX – Nov 2014 – L2 – Q4 – Personal Income Tax

Calculate annual and monthly tax liabilities for Mr. David Olaleye.

You're reporting an error for "TAX – Nov 2014 – L2 – Q4 – Personal Income Tax"

TAX – May 2024 – L2 – SA – Q1 – Personal Income Tax (PIT)

Determine Mr. Ola Alao’s chargeable income and tax payable with respect to benefits and allowances.

You're reporting an error for "TAX – May 2024 – L2 – SA – Q1 – Personal Income Tax (PIT)"

AT – NOV 2018 – L3 – Q2C – Business income – Corporate income tax, Tax administration in Ghana

Calculate taxable income and tax payable for an individual with multiple income sources, and identify tax compliance issues for a private practice.

You're reporting an error for "AT – NOV 2018 – L3 – Q2C – Business income – Corporate income tax, Tax administration in Ghana"

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