Series: AUG 2017

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 20 Marks

ATP – Aug 2017 – L2 – Q5 – Sector-Specific Taxation

Compute Nkrabea Insurance’s 2016 tax liability, including premium income and capital allowances.

Question:
Nkrabea Insurance Company Limited commenced operating in Ghana on 1st January, 2016.
Below is an extract from the Trial Balance as at 31/12/16.

GH¢000
Building (at cost) 1,950
Motor Vehicle (at cost) 630
F & F (at cost) 420
Interest received on loans 183
Interest in Investment 225
Stated Capital 3,600
Gross Premium received 2,760
Claims paid during the year 960
Income Tax paid 210
Commission to Agent 72
General Administrative Expenses 1,050
Reinsurance Premium paid 162
Reinsurance recoveries 540
Premiums returned to clients 57
Notes:
(i) Reserve is calculated at 40% of Net Premium Income
(ii) Assets were acquired on 1st January, 2016
(iii) The General Administration Expenses include GH¢600,000 in respect of depreciation charged for the year.
(iv) The applicable, rates for capital allowance are as follows:

Pool 1 40%
Pool 2 30%
Pool 3 20%
Pool 4 10%
Required:
Compute the tax liability of the company for 2016 year of assessment.
Corporate Tax Rate: 25%

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q5 – Sector-Specific Taxation"

  • 20 Marks

ATP – Aug 2017 – L2 – Q4 – Income Tax Computation

Compute tax credit relief for Mr Brefo Nimo based on dividend income from the Netherlands.

Mr Brefo Nimo returned to Ghana after staying in the Netherlands for over 20 years and took up an appointment with Amanfro Limited as the Director of Finance. His gross monthly basic salary for 2016 year of assessment was GH¢10,000.00. He contributed 5.5% to Social Security and National Insurance Trust (SSNIT). Mr Brefo Nimo has investments in the Netherlands, from which he earned a gross dividend of 2,000 Euros in 2016, from which 350 Euros was withheld as dividend tax and the balance remitted to him in Ghana. A double taxation Agreement exists between Ghana and the Netherlands.
The rate of Exchange is GH¢5.2 to 1.00 Euro.

Required:
a) Compute the Tax Credit Relief that will be granted to Mr Brefo Nimo.

b) Compute the tax liability of Mr Brefo Nimo for 2016 Year of assessment.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q4 – Income Tax Computation"

  • 20 Marks

ATP – Aug 2017 – L2 – Q3 – Employment Income Taxation

Compute tax liability for Mr Alavanyo Godoo for 2016, including salary, allowances, and pension withdrawal.

Mr Alavanyo Godoo was employed as the Chief Executive Officer of Mandigo Company Limited, on a monthly Salary of GH¢20,000.00, subject to review after every three years. His appointment took effect from January 1, 2014. Mr Alavanyo Godoo is provided a soft furnished accommodation and a vehicle and a driver, which is fuelled by the company. He is also entitled to the following other allowances each month: a) Responsibility GH¢1,000.00 b) Accountable Entertainment (supported by receipts) GH¢300.00 c) House / Garden Boy 15% (Basic Salary) d) Clothing (Paid January 1 each year) 20% (Basic Salary) e) Professional Allowance 15% (Basic Salary)

During the year 2016, he received a total dividend of GH¢6,000.00 net of taxes from two companies where he has investments. The total number of ordinary shares respectively in Bremang Ltd and Asukwakwa (Ghana) Ltd are 15,000 and 30,000. Mr Alavanyo Godoo contributes 5.5% of his basic Salary to SSNIT and 10% to the third tier Pension Fund to which his employer also contributes 5%. During the year under review, Mr Alavanyo Godoo withdrew 60% of the balance as at 30th June 2016 from his Pension Fund.

He has the following Life Assurance Policies:

Company Sum Assured GH¢ Premium GH¢
Gomido Insurance Co. Ltd. 40,000.00 3,600.00
Ebeyeyie Co. Ltd 25,000.00 2,400.00

He is married and has three children. The eldest son is attending Medical School at John Hopkins University, Maryland USA and the rest are in Government approved Senior Secondary Schools in Accra. His wife is a housewife and does not provide much for the upkeep of the children. He looks after his 65 year old mother. He has applied for and granted all reliefs.

Required: Compute the tax liability for Mr Alavanyo Godoo for the 2016 year of Assessment.

Annual Tax Rates

GH¢ %
First 2,592 NIL
Next 1,296 5
Next 1,812 10
Next 33,180 17.5
Next 33,880 25

20 Marks

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q3 – Employment Income Taxation"

  • 20 Marks

ATP – Aug 2017 – L2 – Q2 – Indirect Taxes and Capital Taxes

Determine direct and indirect tax liabilities, including penalties, for Tosese Limited for 2015.

Tosese Limited is a company registered in Ghana under the Companies Act 1963, Act 179 and has been in operation for several years. The company has been noted by the Tax Authorities for being non tax compliant and no returns were submitted and paid for direct taxes in the 2015 year of assessment. However, after much Tax Education with the support of his Tax Practitioner, the Finance Manager presented the financial statement to the GRA.

The summarised Income Statement for the year ended 31st December 2015 showed the following.

Tosese Limited Income Statement

Description GH¢
Turnover 5,640,000.00
Direct Costs 4,840,000.00
Gross Profit 800,000.00
Administration and General Expenses 560,000.00
Profit before Tax 240,000.00
Taxation 60,000.00
Profit after Tax 180,000.00
Net Profit Transferred to Income Surplus 180,000.00

Income Surplus Account

Description GH¢
Balance brought forward 1,575,000.00
Add Profit for the year 180,000.00
Balance carried forward 1,755,000.00

The details of the notes are shown below. Note 1. The company is registered for VAT and has not been submitting its returns regularly. The turnover per the VAT Returns submitted to the Commissioner-General during the period under review was GH¢5,080,000.00

Note 2. Direct Costs

Description GH¢
Imports 3,684,000.00
Freight and Insurance 368,400.00
Import Duties 736,800.00
Transport 50,800.00
Total 4,840,000.00

Note 3. Administration and General Expenses included

Description GH¢
Consultancy Fees 25,000.00
Printing and Stationery 84,000.00
Rent (Commercial Property) 61,280.00
Equipment Rentals 15,000.00
Directors Fees 60,000.00

Note 4. The Company since incorporation has never declared and paid any dividend to its four shareholders even though the company has consistently been declaring profit. The Commissioner-General has therefore decided to invoke Section 59 (8) of the Income Tax Act, 2015 Act 896 by notice in writing to apply 40% of the balance on the Income Surplus Account to Dividend Tax.

Required: You are to determine the tax liability due from the company in respect of direct and Indirect Taxes for 2015 year of assessment, including any relevant penalties that are applicable. Ignore Corporate Tax. Total 20 Marks.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q2 – Indirect Taxes and Capital Taxes"

  • 20 Marks

ATP – Aug 2017 – L2 – Q1 – Indirect Taxes

Compute input tax claimable and VAT payable for The Mall Limited for August 2016.

a) The Mall Limited is a company registered under the Companies Act 1963, Act 179 and has been dealing in both taxable and non-taxable supplies. The company has been registered to operate as a VAT registered company. The company’s operations for August 2016 were as follows.

Description GH¢
Total value of taxable supplies 1,451,125
Input Tax on Taxable Supplies 102,000
Input Tax which cannot be attributable directly to Supplies 45,000
Value of Exempt Supplies 300,000
Value of Relief Supplies 65,400

Required: Compute the input tax claimable by The Mall Limited for August 2016 and VAT payable, if any, for the same period.

b). NIMBOLA Limited is a company gazetted by the Commissioner-General of the Ghana Revenue Authority to be under self-assessment tax payment. During the 2016 year of assessment, the estimated Chargeable Income declared by the company was GH¢50,000. However, the actual Chargeable Income declared for the year per the Returns submitted to the Commissioner-General was GH¢80,000.

Required: Calculate (if any) the penalty for underestimation. Assume a statutory Bank of Ghana Discount rate of 25% for the year 2016. 14 marks.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q1 – Indirect Taxes"

  • 20 Marks

ATP – Aug 2017 – L2 – Q5 – Sector-Specific Taxation

Compute Nkrabea Insurance’s 2016 tax liability, including premium income and capital allowances.

Question:
Nkrabea Insurance Company Limited commenced operating in Ghana on 1st January, 2016.
Below is an extract from the Trial Balance as at 31/12/16.

GH¢000
Building (at cost) 1,950
Motor Vehicle (at cost) 630
F & F (at cost) 420
Interest received on loans 183
Interest in Investment 225
Stated Capital 3,600
Gross Premium received 2,760
Claims paid during the year 960
Income Tax paid 210
Commission to Agent 72
General Administrative Expenses 1,050
Reinsurance Premium paid 162
Reinsurance recoveries 540
Premiums returned to clients 57
Notes:
(i) Reserve is calculated at 40% of Net Premium Income
(ii) Assets were acquired on 1st January, 2016
(iii) The General Administration Expenses include GH¢600,000 in respect of depreciation charged for the year.
(iv) The applicable, rates for capital allowance are as follows:

Pool 1 40%
Pool 2 30%
Pool 3 20%
Pool 4 10%
Required:
Compute the tax liability of the company for 2016 year of assessment.
Corporate Tax Rate: 25%

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q5 – Sector-Specific Taxation"

  • 20 Marks

ATP – Aug 2017 – L2 – Q4 – Income Tax Computation

Compute tax credit relief for Mr Brefo Nimo based on dividend income from the Netherlands.

Mr Brefo Nimo returned to Ghana after staying in the Netherlands for over 20 years and took up an appointment with Amanfro Limited as the Director of Finance. His gross monthly basic salary for 2016 year of assessment was GH¢10,000.00. He contributed 5.5% to Social Security and National Insurance Trust (SSNIT). Mr Brefo Nimo has investments in the Netherlands, from which he earned a gross dividend of 2,000 Euros in 2016, from which 350 Euros was withheld as dividend tax and the balance remitted to him in Ghana. A double taxation Agreement exists between Ghana and the Netherlands.
The rate of Exchange is GH¢5.2 to 1.00 Euro.

Required:
a) Compute the Tax Credit Relief that will be granted to Mr Brefo Nimo.

b) Compute the tax liability of Mr Brefo Nimo for 2016 Year of assessment.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q4 – Income Tax Computation"

  • 20 Marks

ATP – Aug 2017 – L2 – Q3 – Employment Income Taxation

Compute tax liability for Mr Alavanyo Godoo for 2016, including salary, allowances, and pension withdrawal.

Mr Alavanyo Godoo was employed as the Chief Executive Officer of Mandigo Company Limited, on a monthly Salary of GH¢20,000.00, subject to review after every three years. His appointment took effect from January 1, 2014. Mr Alavanyo Godoo is provided a soft furnished accommodation and a vehicle and a driver, which is fuelled by the company. He is also entitled to the following other allowances each month: a) Responsibility GH¢1,000.00 b) Accountable Entertainment (supported by receipts) GH¢300.00 c) House / Garden Boy 15% (Basic Salary) d) Clothing (Paid January 1 each year) 20% (Basic Salary) e) Professional Allowance 15% (Basic Salary)

During the year 2016, he received a total dividend of GH¢6,000.00 net of taxes from two companies where he has investments. The total number of ordinary shares respectively in Bremang Ltd and Asukwakwa (Ghana) Ltd are 15,000 and 30,000. Mr Alavanyo Godoo contributes 5.5% of his basic Salary to SSNIT and 10% to the third tier Pension Fund to which his employer also contributes 5%. During the year under review, Mr Alavanyo Godoo withdrew 60% of the balance as at 30th June 2016 from his Pension Fund.

He has the following Life Assurance Policies:

Company Sum Assured GH¢ Premium GH¢
Gomido Insurance Co. Ltd. 40,000.00 3,600.00
Ebeyeyie Co. Ltd 25,000.00 2,400.00

He is married and has three children. The eldest son is attending Medical School at John Hopkins University, Maryland USA and the rest are in Government approved Senior Secondary Schools in Accra. His wife is a housewife and does not provide much for the upkeep of the children. He looks after his 65 year old mother. He has applied for and granted all reliefs.

Required: Compute the tax liability for Mr Alavanyo Godoo for the 2016 year of Assessment.

Annual Tax Rates

GH¢ %
First 2,592 NIL
Next 1,296 5
Next 1,812 10
Next 33,180 17.5
Next 33,880 25

20 Marks

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q3 – Employment Income Taxation"

  • 20 Marks

ATP – Aug 2017 – L2 – Q2 – Indirect Taxes and Capital Taxes

Determine direct and indirect tax liabilities, including penalties, for Tosese Limited for 2015.

Tosese Limited is a company registered in Ghana under the Companies Act 1963, Act 179 and has been in operation for several years. The company has been noted by the Tax Authorities for being non tax compliant and no returns were submitted and paid for direct taxes in the 2015 year of assessment. However, after much Tax Education with the support of his Tax Practitioner, the Finance Manager presented the financial statement to the GRA.

The summarised Income Statement for the year ended 31st December 2015 showed the following.

Tosese Limited Income Statement

Description GH¢
Turnover 5,640,000.00
Direct Costs 4,840,000.00
Gross Profit 800,000.00
Administration and General Expenses 560,000.00
Profit before Tax 240,000.00
Taxation 60,000.00
Profit after Tax 180,000.00
Net Profit Transferred to Income Surplus 180,000.00

Income Surplus Account

Description GH¢
Balance brought forward 1,575,000.00
Add Profit for the year 180,000.00
Balance carried forward 1,755,000.00

The details of the notes are shown below. Note 1. The company is registered for VAT and has not been submitting its returns regularly. The turnover per the VAT Returns submitted to the Commissioner-General during the period under review was GH¢5,080,000.00

Note 2. Direct Costs

Description GH¢
Imports 3,684,000.00
Freight and Insurance 368,400.00
Import Duties 736,800.00
Transport 50,800.00
Total 4,840,000.00

Note 3. Administration and General Expenses included

Description GH¢
Consultancy Fees 25,000.00
Printing and Stationery 84,000.00
Rent (Commercial Property) 61,280.00
Equipment Rentals 15,000.00
Directors Fees 60,000.00

Note 4. The Company since incorporation has never declared and paid any dividend to its four shareholders even though the company has consistently been declaring profit. The Commissioner-General has therefore decided to invoke Section 59 (8) of the Income Tax Act, 2015 Act 896 by notice in writing to apply 40% of the balance on the Income Surplus Account to Dividend Tax.

Required: You are to determine the tax liability due from the company in respect of direct and Indirect Taxes for 2015 year of assessment, including any relevant penalties that are applicable. Ignore Corporate Tax. Total 20 Marks.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q2 – Indirect Taxes and Capital Taxes"

  • 20 Marks

ATP – Aug 2017 – L2 – Q1 – Indirect Taxes

Compute input tax claimable and VAT payable for The Mall Limited for August 2016.

a) The Mall Limited is a company registered under the Companies Act 1963, Act 179 and has been dealing in both taxable and non-taxable supplies. The company has been registered to operate as a VAT registered company. The company’s operations for August 2016 were as follows.

Description GH¢
Total value of taxable supplies 1,451,125
Input Tax on Taxable Supplies 102,000
Input Tax which cannot be attributable directly to Supplies 45,000
Value of Exempt Supplies 300,000
Value of Relief Supplies 65,400

Required: Compute the input tax claimable by The Mall Limited for August 2016 and VAT payable, if any, for the same period.

b). NIMBOLA Limited is a company gazetted by the Commissioner-General of the Ghana Revenue Authority to be under self-assessment tax payment. During the 2016 year of assessment, the estimated Chargeable Income declared by the company was GH¢50,000. However, the actual Chargeable Income declared for the year per the Returns submitted to the Commissioner-General was GH¢80,000.

Required: Calculate (if any) the penalty for underestimation. Assume a statutory Bank of Ghana Discount rate of 25% for the year 2016. 14 marks.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "ATP – Aug 2017 – L2 – Q1 – Indirect Taxes"

knowsia

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Community

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan

Pick a Form

Professional Tutor Application Form
Academic Tutor Application Form
Student Tutor Application Form