AUG 2019 – Knowsia

ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability

Compute Steve Mills’ 2018 tax liability, including salary, allowances, and reliefs.

Question

Mr Steve Mills was employed as the Chief Executive Officer of Mpeasem Company Limited, on a monthly Salary of GH¢ 40,000.00, subject to 20% upward review after every two years. His appointment took effect from January 1, 2015. Mr Steve Mills 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:
i. Responsibility: 2,000.00
ii. Accountable Entertainment: 500.00
iii. House / Garden Boy: 15% (Basic Salary)
iv. Clothing (Paid January 1 each year): 20% (Basic Salary)
v. Professional Allowance: 10% (Basic Salary)

During the year 2018, 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 Ebeyeyie Co. Ltd and Chinderi Oil Mills (Ghana) Ltd are 15,000 and 30,000. Mr Steve Mills contributes 5.5% of his basic Salary to SSNIT and 10% to the third tier Pension Fund to which his employer also contributes 5%. He is married and has three children. The eldest son is attending KNUST, and the rest are in Government approved Senior High Schools in Accra. His wife is a housewife and does not provide much for the up keep of the children. He provides for his 70 year old father. He has applied for and granted all reliefs. Mr Steve Mills represents the company at all state functions and programmes and is therefore expected to be decently dressed at all times. The industry standard also requires all employees to be decently dressed.

Annual Individual Tax Rates (Effective 1st January 2018)

	GH¢	%
First	3,132	NIL
Next	840	5
Next	1,200	10
Next	33,720	17.5
Next	38,892	25

Required:
a. Compute the tax liability for Mr Steve Mills for 2018 year of Assessment.

b. Provide justification for the basis of your treatment of the transactions, where necessary.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Commissioner-General Ruling, Employment Income, Tax Treatment
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2019

ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen

Explain Commissioner-General’s rights to issue Notice of Assessment and its contents.

Question

a). You are a trainee in the office in Brown Green and Associates, a firm of Tax Practitioners. A gentleman, identified later as Mr Kwesi Sikasem walked in to the office fuming with anger saying that he had received a Notice of Assessment from the Ghana Revenue Authority demanding the payment of a total tax liability of 1.2 million Ghana cedis for 2017 and 2018 Years of Assessment. In the course of discussion you realised that he has been in business since October 2016.

Required:

Explain to Mr Kwesi Sikasem the rights of the Commissioner-General to issue a Notice of Assessment and state what is expected in a Notice of Assessment.

b). Mr Thomas Smith a retired employee of the US Border Security has approached you seek your advice on the possibility of forming a company as a Customs House Agent in Tema.

Required:

With reference to the Customs Act, 2015 (Act 891) as amended, advise Mr Thomas Smith on the categories of persons that can engage in the business of customs house agent

Answer

Find Related Questions by Tags, levels, etc.

Tags: Act 891, Customs Act, Customs House Agent, Licensing
Level: Level 2

Topic: Indirect Taxes
Series: AUG 2019

ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties

Compute Yentua Limited’s 2018 tax liabilities, including penalties, using financial statement data.

Question

Yentua Limited is a company registered in Ghana under the Companies Act 1963, Act 179 on 15th September 2017. It started operations on 1st October, 2017. The company buys metal scraps both from internal and external sources and sells to the iron rod manufacturers in Tema. The company was not registered with the Ghana Revenue Authority and therefore has never submitted any tax returns on its operations. The activities of the company came to light when a team of Revenue Officers from the Enforcement unit of the Ghana Revenue Authority met the Managing Director and his staff in full operation. The team educated the Managing Director and his management team on importance of payment of taxes and registering with the Ghana Revenue Authority and submitting the tax returns to the Authorities regularly. The Managing Director then presented Tax Credit Certificates (TCC) totalling GH¢ 134,000 and receipts for duties paid on imported goods as taxes paid and therefore claimed his company was tax compliant. The Managing Director later approached you as a Tax Practitioner to help the company complete its tax returns on its business operations to Ghana Revenue Authority. The extracts from the company’s financial statement presented by the Finance officer for the year ended 30th September 2018 were as follows:

Yentua Limited
Income Statement

	GH¢	GH¢
Turnover		7,800,000.00
Cost of Sales		(6,929,300.00)
Gross Profit		870,700.00
Administration and General Expenses		(660,000.00)
Net Profit		90,000.00

Note 2: Cost of Sales

	GH¢
Local Purchases	4,400,000.00
Imports	1,580,000.00
Freight and Insurance	98,500.00
Import Duties	436,000.00
Cargo Truck	240,000.00
Repairs and Maintenance	52,000.00
Depreciation – Truck	48,000.00
Fuel and Lubricants	24,000.00
Transport and Handling	50,800.00
Total	6,929,300.00

Note 3: Administration and General Expenses

	GH¢
Salaries and Allowances	285,000.00
Directors Remuneration	64,000.00
Consultancy Fees	90,000.00
Printing and Stationery	10,500.00
Rent (Office Building)	60,000.00
Rent (Residential)	36,000.00
Equipment Rentals	79,000.00
Utilities	35,500.00
Total	660,000.00

Required:
Determine the tax liabilities due from the company in respect of direct taxes for 2018 year of assessment, including any relevant penalties that are applicable. Corporate Tax rate applicable to the company is 25%.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital allowances, Corporate Tax, Financial Statement, Penalties, Withholding Tax
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2019

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

Question

Menuaa Manufacturing Limited (MML) produces iron rods for sale in both the domestic and foreign markets. The company is registered with the Ghana Revenue Authority for Value Added Tax (VAT). The company’s transactions during the month of October 2018 were as follows:

Transactions	GH¢
Sales (VAT Inclusive)	756,000
Exports to Sierra Leone	120,000
Relief Supplies	48,000
Purchase of Rolling Equipment	55,500
Hotel Expenses for Staff at a workshop on the new amendment on the VAT law. (VAT Inclusive)	4,500
Stationery purchased for Administration work	15,600
Iron Ingot imported (CIF)	141,750
Local Purchases	50,000

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.
Required:
a. You are required to calculate the NHIL and GET fund levies, VAT payable, if any, and Withholding Tax for October 2018.

b. State the last date when each payment is due.

Answer

Find Related Questions by Tags, levels, etc.

Tags: GET Fund, NHIL, Tax Deadlines, VAT, Withholding Tax
Level: Level 2

Topic: Tax Compliance Framework
Series: AUG 2019

ATP – Aug 2019 – L2 – Q1 – Tax Administration

Identify functions of Ghana Revenue Authority under Act 791 for tax collection objectives.

Question

(a). The Ghana Revenue Authority Act, 2009 (Act 791) sets out the objectives to be achieved in the performance of its duties as an agency of the state responsible for the collection of both direct and indirect taxes.

Required:

Identify the functions that are set out in Act 791 that are to be performed by the Ghana Revenue Authority to enable it achieve the said objectives.

(b). Section 18 of Act 915, Revenue Administration Act, 2016 sets out prohibition on representation and tax advice.

Required:

Explain the conditions under which a person can act as a Tax Consultant.

(c). Section 100 of Act 915, Revenue Administration Act, 2016 provides guidelines to achieve consistency in the administration of the tax laws and provide guidance to affected persons. The Commissioner-General is therefore required to issue practice notes.

Required:

Explain the principles that guide the Commissioner-General in issuing practice notes.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Act 915, Commissioner-General, Practice notes, Revenue Administration Act, Tax Law Guidance
Level: Level 2

Topic: Tax Compliance Framework
Series: AUG 2019

ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability

Compute Steve Mills’ 2018 tax liability, including salary, allowances, and reliefs.

Question

Annual Individual Tax Rates (Effective 1st January 2018)

	GH¢	%
First	3,132	NIL
Next	840	5
Next	1,200	10
Next	33,720	17.5
Next	38,892	25

Required:
a. Compute the tax liability for Mr Steve Mills for 2018 year of Assessment.

b. Provide justification for the basis of your treatment of the transactions, where necessary.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Commissioner-General Ruling, Employment Income, Tax Treatment
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2019

ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen

Explain Commissioner-General’s rights to issue Notice of Assessment and its contents.

Question

Required:

Explain to Mr Kwesi Sikasem the rights of the Commissioner-General to issue a Notice of Assessment and state what is expected in a Notice of Assessment.

b). Mr Thomas Smith a retired employee of the US Border Security has approached you seek your advice on the possibility of forming a company as a Customs House Agent in Tema.

Required:

With reference to the Customs Act, 2015 (Act 891) as amended, advise Mr Thomas Smith on the categories of persons that can engage in the business of customs house agent

Answer

Find Related Questions by Tags, levels, etc.

Tags: Act 891, Customs Act, Customs House Agent, Licensing
Level: Level 2

Topic: Indirect Taxes
Series: AUG 2019

ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties

Compute Yentua Limited’s 2018 tax liabilities, including penalties, using financial statement data.

Question

Yentua Limited
Income Statement

	GH¢	GH¢
Turnover		7,800,000.00
Cost of Sales		(6,929,300.00)
Gross Profit		870,700.00
Administration and General Expenses		(660,000.00)
Net Profit		90,000.00

Note 2: Cost of Sales

	GH¢
Local Purchases	4,400,000.00
Imports	1,580,000.00
Freight and Insurance	98,500.00
Import Duties	436,000.00
Cargo Truck	240,000.00
Repairs and Maintenance	52,000.00
Depreciation – Truck	48,000.00
Fuel and Lubricants	24,000.00
Transport and Handling	50,800.00
Total	6,929,300.00

Note 3: Administration and General Expenses

	GH¢
Salaries and Allowances	285,000.00
Directors Remuneration	64,000.00
Consultancy Fees	90,000.00
Printing and Stationery	10,500.00
Rent (Office Building)	60,000.00
Rent (Residential)	36,000.00
Equipment Rentals	79,000.00
Utilities	35,500.00
Total	660,000.00

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital allowances, Corporate Tax, Financial Statement, Penalties, Withholding Tax
Level: Level 2

Topic: Income Tax Computation
Series: AUG 2019

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

Question

Transactions	GH¢
Sales (VAT Inclusive)	756,000
Exports to Sierra Leone	120,000
Relief Supplies	48,000
Purchase of Rolling Equipment	55,500
Hotel Expenses for Staff at a workshop on the new amendment on the VAT law. (VAT Inclusive)	4,500
Stationery purchased for Administration work	15,600
Iron Ingot imported (CIF)	141,750
Local Purchases	50,000

b. State the last date when each payment is due.

Answer

Find Related Questions by Tags, levels, etc.

Tags: GET Fund, NHIL, Tax Deadlines, VAT, Withholding Tax
Level: Level 2

Topic: Tax Compliance Framework
Series: AUG 2019

ATP – Aug 2019 – L2 – Q1 – Tax Administration

Identify functions of Ghana Revenue Authority under Act 791 for tax collection objectives.

Question

Required:

Identify the functions that are set out in Act 791 that are to be performed by the Ghana Revenue Authority to enable it achieve the said objectives.

(b). Section 18 of Act 915, Revenue Administration Act, 2016 sets out prohibition on representation and tax advice.

Required:

Explain the conditions under which a person can act as a Tax Consultant.

Required:

Explain the principles that guide the Commissioner-General in issuing practice notes.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Act 915, Commissioner-General, Practice notes, Revenue Administration Act, Tax Law Guidance
Level: Level 2

Topic: Tax Compliance Framework
Series: AUG 2019

Series: AUG 2019

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability

Compute Steve Mills’ 2018 tax liability, including salary, allowances, and reliefs.

ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen

Explain Commissioner-General’s rights to issue Notice of Assessment and its contents.

ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties

Compute Yentua Limited’s 2018 tax liabilities, including penalties, using financial statement data.

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

ATP – Aug 2019 – L2 – Q1 – Tax Administration

Identify functions of Ghana Revenue Authority under Act 791 for tax collection objectives.

ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability

Compute Steve Mills’ 2018 tax liability, including salary, allowances, and reliefs.

ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen

Explain Commissioner-General’s rights to issue Notice of Assessment and its contents.

ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties

Compute Yentua Limited’s 2018 tax liabilities, including penalties, using financial statement data.

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

ATP – Aug 2019 – L2 – Q1 – Tax Administration

Identify functions of Ghana Revenue Authority under Act 791 for tax collection objectives.

Our offerings

Contact Info

Customer

Get In Touch

Series: AUG 2019

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability

Compute Steve Mills’ 2018 tax liability, including salary, allowances, and reliefs.

You're reporting an error for "ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability"

ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen

Explain Commissioner-General’s rights to issue Notice of Assessment and its contents.

You're reporting an error for "ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen"

ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties

Compute Yentua Limited’s 2018 tax liabilities, including penalties, using financial statement data.

You're reporting an error for "ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties"

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

You're reporting an error for "ATP – Aug 2019 – L2 – Q2 – Indirect Taxes"

ATP – Aug 2019 – L2 – Q1 – Tax Administration

Identify functions of Ghana Revenue Authority under Act 791 for tax collection objectives.

You're reporting an error for "ATP – Aug 2019 – L2 – Q1 – Tax Administration"

ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability

Compute Steve Mills’ 2018 tax liability, including salary, allowances, and reliefs.

You're reporting an error for "ATP – Aug 2019 – L2 – Q5 – Individual Tax Liability"

ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen

Explain Commissioner-General’s rights to issue Notice of Assessment and its contents.

You're reporting an error for "ATP – Aug 2019 – L2 – Q4 – Notice of Assessmen"

ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties

Compute Yentua Limited’s 2018 tax liabilities, including penalties, using financial statement data.

You're reporting an error for "ATP – Aug 2019 – L2 – Q3 – Corporate Tax and Penalties"

ATP – Aug 2019 – L2 – Q2 – Indirect Taxes

Calculate NHIL, GET Fund, VAT, and Withholding Tax for Menuaa Manufacturing for October 2018.

You're reporting an error for "ATP – Aug 2019 – L2 – Q2 – Indirect Taxes"

ATP – Aug 2019 – L2 – Q1 – Tax Administration

Identify functions of Ghana Revenue Authority under Act 791 for tax collection objectives.

You're reporting an error for "ATP – Aug 2019 – L2 – Q1 – Tax Administration"

Our offerings

Contact Info

Customer

Get In Touch

admin