Provident fund – Knowsia

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?

Answer

Find Related Questions by Tags, levels, etc.

Tags: chargeable income, Directors’ Fees, Dividends, Employment Income, Provident fund, Social Security, Tax Allowances
Level: Level 2

Topic: Capital Gains Tax (CGT)
Series: MAR 2025

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

Question

Mr. Frank Danso was employed by Ghana Trust Ltd on 1st September 2010 on a salary scale of GH¢4,500 x 500-7,500 as the financial controller of the company. He is provided with the following as part of his conditions of service for the 2014 Year of Assessment:

i) Well-furnished rented flat by his employers in respect of which he pays GH¢100 per month as rent by way of deductions at source.
ii) Watchman allowance of GH¢200 per annum, paid directly to Mr. Frank Danso.
iii) Risk allowance of GH¢905 per annum.
iv) Leave allowance of GH¢500 per annum.
v) Garden boy allowance of GH¢100 per quarter paid directly to Mr. Frank Danso.
vi) Medical allowance of GH¢680 per annum.
vii) Meals allowance of GH¢50 per month.
viii) Two maidservants each on wages of GH¢200 per annum. The amount is paid to the maid servants directly by the company.
ix) Bonus of 40% on annual basic salary.
x) Entertainment allowance of GH¢400 a year (accountable).
xi) Duty post allowance of GH¢100 per month.
xii) He has Life Assurance Policies with EIC Ltd. Below are the details:

Policy	Sum Assured (GH¢)	Annual Premium (GH¢)
A	4,000	420
B	2,800	240
C	16,000	1,650
D	5,000	525

xiii) He is entitled to a company car and fuel for both official and private use.
xiv) He has two wives and ten children; four of whom are in SHS in Accra, and the rest are gainfully employed; he caters for 3 of his aged relatives.
xv) He contributes 7% of his salary towards the company’s Provident Fund which has been approved by the National Pension Authority, and he also contributes 5.5% of his salary to the SSNIT.

Required:
a) Compute his tax liabilities for the 2014 Year of Assessment using 2014 rates.
(15 marks)

b) Determine his take-home pay for the 2014 Year of Assessment.
(5 marks)

Total: 20 marks

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Provident fund, Reliefs, Take-home pay, Tax computation, Tax liabilities
Level: Level 3

Topic: Business income - Corporate income tax, Tax administration in Ghana
Series: MAY 2016

POT – Mar 2025 – L2 – Q3 – Taxation of Individuals

Determine Selassi Afolabi’s chargeable income for 2023.

Question

Required: Determine his chargeable income for the 2023 year of assessment.

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?

Answer

Find Related Questions by Tags, levels, etc.

Tags: chargeable income, Directors’ Fees, Dividends, Employment Income, Provident fund, Social Security, Tax Allowances
Level: Level 2

Topic: Capital Gains Tax (CGT)
Series: MAR 2025

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

Question

Policy	Sum Assured (GH¢)	Annual Premium (GH¢)
A	4,000	420
B	2,800	240
C	16,000	1,650
D	5,000	525

Required:
a) Compute his tax liabilities for the 2014 Year of Assessment using 2014 rates.
(15 marks)

b) Determine his take-home pay for the 2014 Year of Assessment.
(5 marks)

Total: 20 marks

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Provident fund, Reliefs, Take-home pay, Tax computation, Tax liabilities
Level: Level 3

Topic: Business income - Corporate income tax, Tax administration in Ghana
Series: MAY 2016

Question Tag: Provident fund

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POT – Mar 2025 – L2 – Q3 – Taxation of Individuals

Determine Selassi Afolabi’s chargeable income for 2023.

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

POT – Mar 2025 – L2 – Q3 – Taxation of Individuals

Determine Selassi Afolabi’s chargeable income for 2023.

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

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POT – Mar 2025 – L2 – Q3 – Taxation of Individuals

Determine Selassi Afolabi’s chargeable income for 2023.

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AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

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POT – Mar 2025 – L2 – Q3 – Taxation of Individuals

Determine Selassi Afolabi’s chargeable income for 2023.

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AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

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