- 20 Marks
Question
Fafali Ghana Limited produces aluminium roofing sheets for both the domestic market and exports to other West African countries. The company is registered with the Ghana Revenue Authority for Value Added Tax (VAT). The company’s transactions during the month of January, 2019 were as follows:
| Item | GH¢ |
|---|---|
| Sales (VAT Inclusive) | 6,804,000.00 |
| Exports to Sierra Leone (US Dollars) | 120,000.00 |
| Relief Supplies | 148,000.00 |
| Purchase of Modelling Equipment | 160,500.00 |
| Staff Training (VAT Inclusive) | 10,800.00 |
| Assembly of Equipment (US Dollars) | 15,600.00 |
| Alumina imported (All duties paid at importation) | 141,750.00 |
| Local Purchases | 180,000.00 |
Unless otherwise stated, Sales and Purchases are all Value Added Tax exclusive. National Health Insurance and GET Fund Levies are also exclusive except where it has been specifically stated. The assembling of equipment was a payment made to a foreign consultant for the service rendered. The average exchange rate for the month was GH¢5.5 to one US dollar.
Required:
a) Calculate the NHIL and GET fund levies, VAT payable, if any, and Withholding Tax for January 2019.
b) State the last date when each payment is due.
Answer
(a). Fafali Ghana Limited Tax Calculations for January 2019
| Item | Value (GH¢) | Cost (GH¢) | GETF (GH¢) | NHIL (GH¢) | INPUT (GH¢) | OUTPUT (GH¢) |
|---|---|---|---|---|---|---|
| Sales | 6,804,000 | 5,760,000 | 144,000 | 144,000 | 756,000 | |
| Exports to Sierra Leone | 660,000 | 660,000 | 0 | 0 | 0 | |
| Relief Supplies | 148,000 | 148,000 | 0 | 0 | 0 | 0 |
| Modelling Equipment | 160,500 | 160,500 | 0 | 0 | 0 | 0 |
| Staff Training | 10,800 | 9,142.86 | 0 | 0 | 0 | 0 |
| Assembly of Equipment | 85,800 | 2,145 | 2,145 | 11,261.25 | ||
| Imports | 141,750 | 120,000 | 3,000 | 3,000 | 15,750 | |
| Local Purchases | 180,000 | 152,381 | 3,809.53 | 3,809.53 | 20,000 | |
| Total | 152,954.53 | 153,954.53 | 35,750 | 767,261.25 |
Summary
NHIL/GET FUND
| Item | GH¢ |
|---|---|
| NHIL | 152,954.53 |
| GET FUND | 152,954.53 |
| Total | 305,909.06 |
VAT
| Item | GH¢ |
|---|---|
| Output VAT | 767,261.25 |
| Input VAT | 35,750 |
| Tax Payable | 731,511 |
b). Payment Due Dates for January 2019
- NHIL and GET Fund Levies: Last working day of February 2019.
- VAT: Last working day of February 2019.
- Withholding Tax: Within 15 days after the end of January 2019.
- Tags: Indirect Taxes, Payment Due Dates, Tax Compliance
- Level: Level 2
- Topic: Tax Compliance Framework
- Series: AUGUST 2020
- Uploader: Samuel Duah