Question Tag: Tax Administration

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  • 20 Marks

TAI – Aug 2020 – L1 – Q1 – Tax Audit Roles

Explain five roles of the tax audit and investigation program in Ghana's tax administration.

(A) The audit program of Ghana Revenue Authority performs a number of important roles that, if effectively carried out, can make a significant contribution to improve administration of the tax system in the country.

Required: Explain five roles tax audit and investigation program performs in the tax administration of Ghana.                                                                                                                                                                                                                                                                                   (B)

The efficiency and effectiveness of Ghana Revenue Authority’s audit activities depend mainly on the nature and scope of powers in the underlying legal framework in place. Among such powers includes the provision of adequate powers for obtaining information and an appropriate regime of sanctions to deter and penalize non-compliance.

Required: State and briefly describe five (5) key elements of legal framework relating to the tax audit function of Ghana Revenue Authority as under the tax laws and administration of Ghana.

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  • 20 Marks

AT – Mar 2025 – L3 – Q1 – Taxation of Companies

Compute allowable financial cost and company tax payable for Afraa LTD for 2024, including tax implications.

a) Afraa LTD made a net profit before tax of GH₵1,100,000 for the year 2024.
The following were effected before arriving at the net profit before tax:

  • Depreciation: GH₵105,000.
  • Income tax paid (meant for last quarter of 2023): GH₵22,500.
  • Financial cost (from financial derivatives): GH₵350,000
  • Financial gain (from financial derivatives): GH₵105,000

Additional Information:
Capital allowance of GH₵180,000 and Donations to Osu Children’s home of GH₵30,000 which were agreed on with Ghana Revenue Authority are yet to be recognised in the financial statements.
Required:
Compute the allowable financial cost and the company tax payable for 2024. Explain any other tax implications.

b) Premier Insurance Company LTD located at Koforidua submitted the following accounts for the year ended 31 December 2024.

Note GH₵
Gross premiums received 3,380,000
Premiums returned to insurers 118,500
Reinsurance premiums paid 126,000
Claims settled 1,185,000
Reinsurance claims recovered 24,000
Commissions to agents 271,200
General administrative expenses 881,900
Interest on Bank Deposits (Net) 418,000
Gross income from insurance consultancy services rendered 350,000
Dividends received (Net) 341,000
Reserves for unexpired risk at 31/12/2023 910,000

Notes:

  1. Commissions to agents
    | | GH₵ | |——————————–|————| | Casual commission agents | 250,000 | | Unnamed commission agents | 21,200 |
  2. General administrative expenses
    | | GH₵ | |——————————–|————| | Water and electricity | 69,200 | | Office wages and salaries | 414,560 | | Repairs to premises | 91,920 | | Motor expenses | 57,040 | | Depreciation | 56,800 | | Loss on sale of equipment | 20,640 | | Professional charges (Note iii) | 66,000 | | Sundry expenses (Note iv) | 103,840 | | Entertainment | 1,900 |

i) Repairs to premises

GH₵
Construction of main gate and Landscaping 86,360
Minor office decoration 3,600
Re-plastering of damaged walls 1,960

ii) Motor expenses

GH₵
Travelling expenses 7,200
Purchase of new vehicle engine 35,000
Fuel and lubricants 14,840

iii) Professional charges

GH₵
Accounting and audit fees 23,200
Cost of obtaining new lease to build an office complex 42,800

iv) Sundry expenses

GH₵
Penalty for late filling of tax returns 9,500
Donation to Ghana Education Trust Fund (confirmed by GRA) 8,000
Postage and courier services 7,200
Fines for vehicle wrong parking 1,300
Office cleaning 29,000
Business Operating Permit paid to Ada District Assembly 15,000
Printing and stationery 25,500
Telephone and communication/internet services 8,340

Other information:

  • Reserves for unexpired risk is calculated at 45% of net insurance premium.
  • Capital allowance for the year has been agreed at GH₵65,400 after consideration of all available information in the tax returns.
    Required:
    Determine the chargeable income of Premier Insurance Company LTD.
    (9 marks)

c) Practice notes are issued by the Commissioner-General of the Ghana Revenue Authority (GRA), by publishing a notice in the Gazette or on their website or in at least two daily newspapers of national circulation.

Required:

As a tax finalist working with Kato Chartered Accountants, explain to your study partner FOUR purposes of issuing practice notes.

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  • 2 Marks

Principles of Taxation – Nov 2024 – L2 – Q2c – Withholding VAT Scheme

Explanation of the objectives of the Withholding VAT Scheme.

One of the innovative measures introduced by the Ghana Revenue Authority (GRA) is the Withholding VAT Scheme, designed to enhance tax compliance.

Required:
Describe FOUR objectives of the Withholding VAT Scheme.

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  • 2 Marks

PT – Nov 2024 – L2 – Q2a – Integration of Revenue Agencies into GRA

Explanation of the benefits resulting from the consolidation of revenue agencies into GRA.

In 2009, the former revenue agencies (VAT, IRS, and CEPS) were consolidated into the Ghana Revenue Authority (GRA). This integration was anticipated to provide certain benefits to both taxpayers and the overall tax administration.

Required:

State FOUR benefits resulting from the integration of the revenue agencies into the GRA

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  • 20 Marks

ATAX – May 2021 – L3 – Q6 – Tax Administration and Dispute Resolution

Explanation of fiscal federalism, roles and tax rights of government tiers, tax administration at the state level, and remedies for multiple taxation.

Nigeria is generally described as a Federation with three levels of government with varying but sometimes overlapping tax powers.

Required:

a. Explain the term “Fiscal Federalism” and give examples of other countries that may be described as a Federation. (6 Marks)

b. Discuss briefly the following:
i. Roles of the three tiers of government. (3 Marks)
ii. Structure and tax rights of different levels of government. (3 Marks)
iii. Functions of the various tax administrative organs at the State government level. (3 Marks)

c. Articulate the causes and possible remedies of multiple taxation in Nigeria. (5 Marks)

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  • 20 Marks

ATAX – May 2022 – L3 – Q2 – Emerging Trends in Taxation

Discuss technology-driven tools, their impact, and challenges in tax practice and administration.

Professional accountants engaged in tax practice or tax administration are often confronted with challenges due to the changing operating environment, particularly disruptive technologies. While clients demand cutting-edge services, many tax administrators in Nigeria still carry out their work manually.

In a seminar organised by ICAN, you highlighted that leveraging information technology could help tax practitioners and administrators enhance their work and remain relevant in today’s dynamic environment.

After the seminar, a principal partner of a traditional accounting firm approached you to organise a two-day in-house training for his staff on “Technological tools, impact, and challenges to tax practice and administration.”

Required:

Prepare a paper focusing on the following areas:
a. Identification and explanation of FOUR technology-driven tools that tax practitioners and administrators could use to enhance their work and reporting (8 Marks).
b. The impact of the identified technology-driven tools on tax practice and administration (8 Marks).
c. Challenges of technology-driven tools to tax practice and administration (4 Marks).

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  • 9 Marks

TAX – Nov 2023 – L2 – Q3b – Tax Administration and Enforcement

Explain the roles and responsibilities of government, taxpayers, and revenue agencies in Nigeria’s National Tax Policy.

In line with the provisions of the revised National Tax Policy (NTP) in 2017, explain the roles and responsibilities of the following stakeholders:

i. The government (3 Marks)
ii. The taxpayers (3 Marks)
iii. Revenue agencies (3 Marks)

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  • 15 Marks

TAX – Nov 2014 – L2 – Q6 – Tax Administration and Enforcement

Draft an objection letter addressing a Best of Judgment assessment and provide relevant tax liability calculations for Osondu Bako Company Ltd.

Osondu Bako Company Limited has been in business for many years as a general business entrepreneur.

The Company prepares its accounts to 31 December of every year. The Company, however, submitted its audited Financial Statements for the year ended 31 December 2012 on 27 May 2013.

The Company applied for a Tax Clearance Certificate on 26 August 2014, but the issuance of the certificate was delayed by the Revenue. Instead of issuing the Tax Clearance Certificate, a Best of Judgment assessment of N3,450,000 was raised on the company.

The date on the Notice of Assessment was 30 May 2014, but it was served on the company on 31 August 2014.

Stated below is information relating to the financial statements of the company for the year ended 31 December 2012:

Financial Statement Item Naira (N’000)
Profit per Accounts 3,400
Depreciation 380
Capital Allowances agreed with Revenue 590
Revenue 12,050
Net Assets 8,400
Gross Profit 960
Share Capital 10,000

The company paid all the tax liabilities. Despite this, the Chief Executive Officer was surprised and concerned upon receiving the Notice of Best of Judgment Assessment from the tax authority. Consequently, you have been engaged by the company as a Tax Consultant.

You are required to:

  1. Write a Letter of Objection to the Tax office in respect of the Best of Judgment Assessment along with relevant workings.
    (15 Marks)

 

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  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q6 – The Nigerian Tax System

Identify which responsibility is not a part of the National Tax Policy 2017 for all levels of government.

Under the national tax policy (NTP), 2017, which of the following is NOT a specific responsibility of all levels and arms of government?
A. Implement and regularly review tax policies and laws
B. Provide information on all revenues collected on a quarterly basis
C. Ensure adequate funding, administrative and operational autonomy of tax authorities
D. Ensure that aspiring political office holders clearly understand the tax policy and the Nigerian tax system and are able to articulate their plans for the tax system for which they will be held accountable
E. Ensure a reasonable transition period of between three and six months before implementation of a new tax

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  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q5 – Tax Administration and Enforcement

Identify the correct name for the management board of the Federal Inland Revenue Service.

The management board of the Federal Inland Revenue Service is known as:
A. Federal Inland Revenue Service Board
B. Federal Internal Revenue Service Board
C. Board of Federal Inland Revenue Service
D. Board of Federal Revenue Service
E. Federal Board of Inland Revenue Service

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  • 5 Marks

PT – Nov 2023 – L2 – Q1a – Tax Administration

Outline the procedures for obtaining an extension for filing corporate tax returns.

The Managing Director of Atadeka Ltd has been informed that you are undertaking a course in taxation at the Institute of Chartered Accountants, Ghana and has sought your advice on the procedures for extension of time to file the company’s Corporate Tax Returns.

Required:
Outline the procedures for extension of time to file tax returns to the Managing Director.

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  • 5 Marks

PT – Nov 2023 – L2 – Q1c – Overview of the Ghanaian Tax System and Fiscal Policy

State five functions performed by the Ghana Revenue Authority.

Ghana Revenue Authority has been charged to perform certain functions as enacted by Ghana Revenue Authority Act, 2009 (Act 791).

Required:
State FIVE (5) functions performed by Ghana Revenue Authority.

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  • 5 Marks

PT – Nov 2023 – L2 – Q1d – Income Tax Liabilities

Outline the sanctions imposed for failure to file tax returns.

Tax administration encompasses assessment, collection, and enforcement of taxes legally due to the state. The enforcement of tax obligations requires an imposition of penalties and interest charges for non-compliance.

Required:
State the sanctions for failing to file tax returns.

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  • 5 Marks

PT – May 2020 – L2 – Q2d – Value-Added Tax (VAT)

Discusses the conditions under which a small business can apply for VAT registration without meeting the threshold requirements.

Abah Enterprise is a small business but intends to bid for government contracts. It has a very small cash flow, with turnover unable to be registered under the compulsory registration arrangement for Value Added Tax. The proprietor of Abah Enterprise feels that if the enterprise is not registered for Value Added Tax, it will be difficult to be able to bid for government contracts.

Required:
Under what condition can Abah Enterprise apply to Ghana Revenue Authority for Value Added Tax Registration without meeting the threshold registration requirements under section 6 of the Value Added Tax Act 2013 (Act 870)?
(5 marks)

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  • 2 Marks

PT – May 2020 – L2 – Q2c – Value-Added Tax (VAT),

Explains the purpose of implementing Withholding VAT in Ghana.

The introduction of Withholding Value Added Tax was widely celebrated by tax administrators and tax practitioners as it is believed the benefits to be raked by the Ghana Revenue Authority would be enormous.

Required:
What purpose does Withholding Value Added Tax seek to achieve?
(2 marks)

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  • 5 Marks

PT – May 2020 – L2 – Q2a – Value-Added Tax (VAT),

Examines the VAT implications for a non-resident company's purchase and servicing of vehicles in Ghana.

Pamela Noi Ltd is a non-resident person. The Company’s Procurement Officer came down to Ghana to buy Ten (10) Toyota Vehicles manufactured by Safo Kantanka to be delivered in Mali. The vehicles are going to be used in Mali. The management of Pamela Noi Ltd requested that the vehicles be serviced in Ghana by High Class Mechanic, a popular mechanic in Accra-Ghana.

Required:

i) What is the Value Added Tax (VAT) implication on the vehicle to be acquired by Pamela Noi Ltd?
(2.5 marks)

ii) What is the VAT implication of the servicing of the vehicle in Ghana?
(2.5 marks)

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  • 2 Marks

PT – May 2020 – L2 – Q1d – Tax Administration

Defines what constitutes a tax return.

What constitutes a Tax Return?
(2 marks)

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  • 8 Marks

PT – May 2020 – L2 – Q1c – Tax Administration

This question outlines the conditions that must be met by a company before the Commissioner-General can make a determination on a tax objection.

Knaah-Shormeh Ltd has to settle Ghana Revenue Authority on the following tax liabilities:

Tax Liabilities Amount (GH¢)
Custom duties 1,000,000
Withholding Tax Surcharge 80,000
Value Added Tax 500,000
Corporate Tax 100,000
Total Liability 1,680,000
Additional Information:

50% of the Value Added Tax relates to imports.
The above came about from an adjusted assessment through an audit conducted and a report submitted on 31 January 2019.
The company has engaged Miracle Consultants, a firm of Tax Practitioners, to help it object to the assessment, claiming it is excessive and erroneous based on its facts and circumstances.
Required:
What conditions must be met by Knaah-Shormeh Ltd before the Commissioner-General makes a determination on the objection? (8 marks)

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  • 6 Marks

PT – March 2023 – L2 – Q5a – Tax Administration

State the transactions that require the use of a Tax Clearance Certificate (TCC).

In 2021, the Ghana Revenue Authority migrated fully to an online portal for the filing and payment of taxes. One process included in this migration was the obtainment of a Tax Clearance Certificate (TCC), which plays an important role in tax compliance.

Required:

State SIX (6) transactions that require the use of a TCC.

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  • 3 Marks

PT – July 2023 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explanation of three situations where a taxpayer cannot claim an input tax under VAT rules.

State THREE (3) situations under which a taxpayer cannot claim an input tax. (3 marks)

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