- 18 Marks
PBL – APR 2014 – L1 – Q5 – Grounds for Court-Ordered Winding Up of a Company
Grounds on which a court will order the winding up of a company.
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Subject: PRINCIPLES OF TAXATION
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- 20 Marks
POT – Mar 2025 – L2 – Q5 – Withholding Tax
State five payments exempt from withholding taxes in Ghana.
Question
a) The Managing Director of Kantorse LTD is worried about the amount of withholding tax deductions the company suffers when the company receives payment for the supply of goods to some customers. He has heard that some payments could be exempted from withholding taxes.
Required: State FIVE payments that are exempt from withholding taxes.
b) State FIVE responsibilities of a VAT Withholding Agent.
c) The Ghana Revenue Authority (GRA) has implemented an online tax filing system that allows taxpayers to submit their tax returns through the GRA portal. This system is part of the broader digitalization effort aimed at enhancing tax compliance and administration in Ghana.
Required: i) Discuss FOUR benefits of using the GRA online tax filing system for both taxpayers and tax administrators.
ii) Identify TWO challenges that taxpayers may face when using the online tax filing system and recommend possible solutions.
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- Tags: Exempt payments, Income Tax Act, Tax Compliance, Withholding Tax
- Level: Level 2
- Topic: Digital Taxation, Tax Administration
- Series: MAR 2025
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- 20 Marks
POT – Mar 2025 – L2 – Q4- Partnership Taxation
Compute Nmani Pharmacy’s chargeable income for 2023.
Question
a) Three pharmacy students, Abanga, Banzey and Chambas who completed the Tamale Technical University have teamed up to undertake a business venture in the pharmaceutical sector under a Trading Name Nmani Pharmacy. They agreed to share profit and losses in the ratio 3:2:1 for Abanga, Banzey and Chambas respectively. The details provided below relate to the business financial performance for the year 2023.
| Details | GH¢ |
|---|---|
| Sales | 663,400 |
| Cost of goods sold: | |
| Opening inventory | 150,000 |
| Purchases | 300,000 |
| 450,000 | |
| Closing inventory | (120,000) |
| 330,000 | |
| Gross profit | 333,400 |
| Less expenses: | |
| Staff cost | 102,000 |
| Business promotions | 58,100 |
| Depreciation | 98,200 |
| Electricity and water | 53,000 |
| Expired drugs | 12,100 |
| Donation | 78,000 |
| Rent and rates | 15,000 |
| Sundry expenses | 50,000 |
| Vehicle running cost | 63,000 |
| (529,400) | |
| Net profit | 134,000 |
| Tax paid | (15,200) |
| Net profit after tax | 118,800 |
Additional Information:
- Staff cost includes monthly stipend allocations to the aged parents of the partners totaling GH¢18,000.
- All three Partners are taking care of their aged parents who are more than 60 years.
- Business promotions include lunch expenses of the partners amounting to GH¢21,200.
- Donations include funeral donation made during the funeral of the mother of the Vice Chancellor of the Tamale Technical University amounting to GH¢20,000.
- Sundry expenses include fine amounting to GH¢32,000 imposed by the Food and Drugs Authority for failure to remove some expired drugs from shelves.
- The Partners received Withholding Tax Certificates indicating an amount of GH¢15,200 from the Binabaani European Hospital for medical consumables supplied to the hospital.
- Capital allowance has been agreed with the Ghana Revenue Authority at GH¢104,200.
Required: i) Compute the chargeable income for Nmani Pharmacy for the 2023 Year of Assessment.
(ii) Compute the net tax payable by each partner for the year 2023.
(b) In line with the provisions of the Income Tax Act, 2015 (Act 896), partnership and limited liability companies in Ghana are taxed in accordance with their residency status in a year of assessment.
Required: State the criteria for the determination of the residency status of partnership and limited liability companies.
(c) All over the world, countries have introduced policies to guarantee income for their hard-working workforce who may go on retirement to enable them to live meaningful lives after retirement. Ghana’s pension system aims to provide personal financial security for employees in their retirement years.
Required: Describe the current pension system in Ghana.
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- 20 Marks
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?
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- 20 Marks
POT – Mar 2025 – L2 – Q2 – Value Added Tax
State circumstances for declining voluntary VAT registration in Ghana.
Question
a) Although the Value Added Tax Act, 2013 (Act 870) as amended, allows for voluntary VAT registration, there are situations where an application for such registration may be declined.
Required: State the circumstances under which a voluntary VAT registration application might be declined by the Commissioner-General.
b) Maame Yeboah, a VAT-registered trader, set aside goods valued at GH¢12,000 for Nene Abayateye, who made a deposit of GH¢2,000. The agreement stipulated that the goods would be delivered once the remaining GH¢10,000 was paid. However, by mutual agreement, the contract was terminated before the full payment was made.
Required: Explain the VAT implications of these transactions.
c) Woara Manufacturing LTD, based in Techiman, produces roofing sheets. The company has recently registered for VAT but is uncertain about how to handle input VAT paid before their registration. The company seeks your advice on this matter.
Required: Provide guidance on the rules regarding the deductibility of input VAT that was incurred prior to a company’s VAT registration.
d) Naa Pioluo, a postpaid customer of Telecel Ghana LTD, received his billing for June 2024, amounting to GH¢638,250, which includes all applicable taxes and levies. Concerned about the charges for his telephone usage, he wishes to understand the tax breakdown within the total amount.
Required: Calculate the amounts for the following taxes included in the June 2024 bill: i) VAT ii) National Health Insurance Levy (NHIL). iii) Ghana Education Trust Fund Levy (GETL). iv) COVID-19 Levy. v) Communication Service Tax (CST).
e) A close relative of yours is into a profitable business in Ghana. The business has had a tax decision made on it by the Commissioner-General. Your relative has objected to the tax decision and the matter has been referred to the Technical and Objection Committee of the Ghana Revenue Authority (GRA) for a determination. Your relative has invited you on the matter to represent him before the Technical and Objection Committee.
Required: What steps will you follow to ensure proper representation and success in resolving the matter?
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- 20 Marks
POT – Mar 2025 – L2 – Q1- Ghana Tax Structure
Explain the nature of Ghana's tax structure with examples focusing on tax classification and calculation methods.
Question
a) Tax imposes a burden on the tax payer. The type and nature of the burden depends on the tax structure that is being used in a jurisdiction. Ghana’s case is no different.
Required: Explain the nature of Ghana’s Tax Structure with applicable examples.
b) The Ghana Revenue Authority has recently made some major tax reforms in its tax administration efforts. These, by and large, have created convenience to the tax paying community.
Required:
i) State FOUR areas that would usually need tax reforms.
ii) State SIX reforms that have been made to tax administration in Ghana over the years.
Find Related Questions by Tags, levels, etc.
- Tags: Direct Tax, Ghana tax system, Indirect Tax, Progressive Tax, Proportional Tax, Regressive Tax, Tax Structure
- Level: Level 2
- Topic: Tax Classificatio
- Series: MAR 2025
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- 5 Marks
PT- Nov 2024 – L2 – Q5d – Data Analytics in Taxation
Explain how data analytics can be used to detect tax evasion and provide examples of how GRA might use data analytics to enhance tax compliance.
Question
GRA’s use of data analytics has become increasingly important in identifying tax evasion and improving compliance.
Required:
i) Explain how data analytics can be used to detect tax evasion.
ii) Provide TWO examples of how GRA might use data analytics to enhance tax compliance.
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- 5 Marks
PT – Nov 2024 – L2 – Q5c – E-Auditing and Tax Compliance
Explain e-auditing, its differences from traditional tax audits, and discuss advantages for taxpayers and tax authorities.
Question
The integration of Information Technology in tax administration has enabled the Ghana Revenue Authority (GRA) to adopt e-auditing processes, allowing for the remote examination of taxpayers’ records. Required:
i) Describe the process of e-auditing and how it differs from traditional tax audits.
ii) Discuss TWO advantages of e-auditing for both the taxpayer and the tax authority.
Find Related Questions by Tags, levels, etc.
- Tags: Data Analytics, Digital Taxation, E-Auditing, Ghana Revenue Authority, Tax Compliance
- Level: Level 2
- Topic: Application of Information Technology in Taxation
- Series: Nov 2024
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- 5 Marks
PT – Nov 2024 – L2 – Q5b – Withholding Tax & VAT Calculation
Compute VAT and direct tax withheld on a taxable supply of medical consumables to a tax withholding agent.
Question
Charley Chemist LTD made a taxable supply of medical consumables amounting to GH¢750,000 exclusive of VAT and levies on 23 November 2023 to the University of Ghana Medical Centre. The University of Ghana Medical Centre is a withholding tax agent for both VAT withholding and Direct Tax withholding.
Required:
i) Compute the amount of VAT withheld by the University of Ghana Medical Center.
ii) Compute the amount of direct tax withheld by the University of Ghana Medical Centre.
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- 5 Marks
PT – Nov 2024 – L2 – Q5a – Notification to Commissioner-General for Non-Resident Contracts
Requirements for notifying the Commissioner-General when a resident contracts a non-resident.
Question
For the purpose of withholding tax, the Income Tax Act, 2016 (Act 896) requires a resident person who enters into a contract with a non-resident person which gives rise to income from Ghana to notify the Commissioner-General within thirty (30) days.
Required:
State the items that must be detailed in the notification to the Commissioner-General.
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- 18 Marks
PBL – APR 2014 – L1 – Q5 – Grounds for Court-Ordered Winding Up of a Company
Grounds on which a court will order the winding up of a company.
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- 20 Marks
POT – Mar 2025 – L2 – Q5 – Withholding Tax
State five payments exempt from withholding taxes in Ghana.
Question
a) The Managing Director of Kantorse LTD is worried about the amount of withholding tax deductions the company suffers when the company receives payment for the supply of goods to some customers. He has heard that some payments could be exempted from withholding taxes.
Required: State FIVE payments that are exempt from withholding taxes.
b) State FIVE responsibilities of a VAT Withholding Agent.
c) The Ghana Revenue Authority (GRA) has implemented an online tax filing system that allows taxpayers to submit their tax returns through the GRA portal. This system is part of the broader digitalization effort aimed at enhancing tax compliance and administration in Ghana.
Required: i) Discuss FOUR benefits of using the GRA online tax filing system for both taxpayers and tax administrators.
ii) Identify TWO challenges that taxpayers may face when using the online tax filing system and recommend possible solutions.
Find Related Questions by Tags, levels, etc.
- Tags: Exempt payments, Income Tax Act, Tax Compliance, Withholding Tax
- Level: Level 2
- Topic: Digital Taxation, Tax Administration
- Series: MAR 2025
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- 20 Marks
POT – Mar 2025 – L2 – Q4- Partnership Taxation
Compute Nmani Pharmacy’s chargeable income for 2023.
Question
a) Three pharmacy students, Abanga, Banzey and Chambas who completed the Tamale Technical University have teamed up to undertake a business venture in the pharmaceutical sector under a Trading Name Nmani Pharmacy. They agreed to share profit and losses in the ratio 3:2:1 for Abanga, Banzey and Chambas respectively. The details provided below relate to the business financial performance for the year 2023.
| Details | GH¢ |
|---|---|
| Sales | 663,400 |
| Cost of goods sold: | |
| Opening inventory | 150,000 |
| Purchases | 300,000 |
| 450,000 | |
| Closing inventory | (120,000) |
| 330,000 | |
| Gross profit | 333,400 |
| Less expenses: | |
| Staff cost | 102,000 |
| Business promotions | 58,100 |
| Depreciation | 98,200 |
| Electricity and water | 53,000 |
| Expired drugs | 12,100 |
| Donation | 78,000 |
| Rent and rates | 15,000 |
| Sundry expenses | 50,000 |
| Vehicle running cost | 63,000 |
| (529,400) | |
| Net profit | 134,000 |
| Tax paid | (15,200) |
| Net profit after tax | 118,800 |
Additional Information:
- Staff cost includes monthly stipend allocations to the aged parents of the partners totaling GH¢18,000.
- All three Partners are taking care of their aged parents who are more than 60 years.
- Business promotions include lunch expenses of the partners amounting to GH¢21,200.
- Donations include funeral donation made during the funeral of the mother of the Vice Chancellor of the Tamale Technical University amounting to GH¢20,000.
- Sundry expenses include fine amounting to GH¢32,000 imposed by the Food and Drugs Authority for failure to remove some expired drugs from shelves.
- The Partners received Withholding Tax Certificates indicating an amount of GH¢15,200 from the Binabaani European Hospital for medical consumables supplied to the hospital.
- Capital allowance has been agreed with the Ghana Revenue Authority at GH¢104,200.
Required: i) Compute the chargeable income for Nmani Pharmacy for the 2023 Year of Assessment.
(ii) Compute the net tax payable by each partner for the year 2023.
(b) In line with the provisions of the Income Tax Act, 2015 (Act 896), partnership and limited liability companies in Ghana are taxed in accordance with their residency status in a year of assessment.
Required: State the criteria for the determination of the residency status of partnership and limited liability companies.
(c) All over the world, countries have introduced policies to guarantee income for their hard-working workforce who may go on retirement to enable them to live meaningful lives after retirement. Ghana’s pension system aims to provide personal financial security for employees in their retirement years.
Required: Describe the current pension system in Ghana.
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Report an error
- 20 Marks
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?
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Report an error
- 20 Marks
POT – Mar 2025 – L2 – Q2 – Value Added Tax
State circumstances for declining voluntary VAT registration in Ghana.
Question
a) Although the Value Added Tax Act, 2013 (Act 870) as amended, allows for voluntary VAT registration, there are situations where an application for such registration may be declined.
Required: State the circumstances under which a voluntary VAT registration application might be declined by the Commissioner-General.
b) Maame Yeboah, a VAT-registered trader, set aside goods valued at GH¢12,000 for Nene Abayateye, who made a deposit of GH¢2,000. The agreement stipulated that the goods would be delivered once the remaining GH¢10,000 was paid. However, by mutual agreement, the contract was terminated before the full payment was made.
Required: Explain the VAT implications of these transactions.
c) Woara Manufacturing LTD, based in Techiman, produces roofing sheets. The company has recently registered for VAT but is uncertain about how to handle input VAT paid before their registration. The company seeks your advice on this matter.
Required: Provide guidance on the rules regarding the deductibility of input VAT that was incurred prior to a company’s VAT registration.
d) Naa Pioluo, a postpaid customer of Telecel Ghana LTD, received his billing for June 2024, amounting to GH¢638,250, which includes all applicable taxes and levies. Concerned about the charges for his telephone usage, he wishes to understand the tax breakdown within the total amount.
Required: Calculate the amounts for the following taxes included in the June 2024 bill: i) VAT ii) National Health Insurance Levy (NHIL). iii) Ghana Education Trust Fund Levy (GETL). iv) COVID-19 Levy. v) Communication Service Tax (CST).
e) A close relative of yours is into a profitable business in Ghana. The business has had a tax decision made on it by the Commissioner-General. Your relative has objected to the tax decision and the matter has been referred to the Technical and Objection Committee of the Ghana Revenue Authority (GRA) for a determination. Your relative has invited you on the matter to represent him before the Technical and Objection Committee.
Required: What steps will you follow to ensure proper representation and success in resolving the matter?
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Report an error
- 20 Marks
POT – Mar 2025 – L2 – Q1- Ghana Tax Structure
Explain the nature of Ghana's tax structure with examples focusing on tax classification and calculation methods.
Question
a) Tax imposes a burden on the tax payer. The type and nature of the burden depends on the tax structure that is being used in a jurisdiction. Ghana’s case is no different.
Required: Explain the nature of Ghana’s Tax Structure with applicable examples.
b) The Ghana Revenue Authority has recently made some major tax reforms in its tax administration efforts. These, by and large, have created convenience to the tax paying community.
Required:
i) State FOUR areas that would usually need tax reforms.
ii) State SIX reforms that have been made to tax administration in Ghana over the years.
Find Related Questions by Tags, levels, etc.
- Tags: Direct Tax, Ghana tax system, Indirect Tax, Progressive Tax, Proportional Tax, Regressive Tax, Tax Structure
- Level: Level 2
- Topic: Tax Classificatio
- Series: MAR 2025
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- 5 Marks
PT- Nov 2024 – L2 – Q5d – Data Analytics in Taxation
Explain how data analytics can be used to detect tax evasion and provide examples of how GRA might use data analytics to enhance tax compliance.
Question
GRA’s use of data analytics has become increasingly important in identifying tax evasion and improving compliance.
Required:
i) Explain how data analytics can be used to detect tax evasion.
ii) Provide TWO examples of how GRA might use data analytics to enhance tax compliance.
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Report an error
- 5 Marks
PT – Nov 2024 – L2 – Q5c – E-Auditing and Tax Compliance
Explain e-auditing, its differences from traditional tax audits, and discuss advantages for taxpayers and tax authorities.
Question
The integration of Information Technology in tax administration has enabled the Ghana Revenue Authority (GRA) to adopt e-auditing processes, allowing for the remote examination of taxpayers’ records. Required:
i) Describe the process of e-auditing and how it differs from traditional tax audits.
ii) Discuss TWO advantages of e-auditing for both the taxpayer and the tax authority.
Find Related Questions by Tags, levels, etc.
- Tags: Data Analytics, Digital Taxation, E-Auditing, Ghana Revenue Authority, Tax Compliance
- Level: Level 2
- Topic: Application of Information Technology in Taxation
- Series: Nov 2024
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- 5 Marks
PT – Nov 2024 – L2 – Q5b – Withholding Tax & VAT Calculation
Compute VAT and direct tax withheld on a taxable supply of medical consumables to a tax withholding agent.
Question
Charley Chemist LTD made a taxable supply of medical consumables amounting to GH¢750,000 exclusive of VAT and levies on 23 November 2023 to the University of Ghana Medical Centre. The University of Ghana Medical Centre is a withholding tax agent for both VAT withholding and Direct Tax withholding.
Required:
i) Compute the amount of VAT withheld by the University of Ghana Medical Center.
ii) Compute the amount of direct tax withheld by the University of Ghana Medical Centre.
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- 5 Marks
PT – Nov 2024 – L2 – Q5a – Notification to Commissioner-General for Non-Resident Contracts
Requirements for notifying the Commissioner-General when a resident contracts a non-resident.
Question
For the purpose of withholding tax, the Income Tax Act, 2016 (Act 896) requires a resident person who enters into a contract with a non-resident person which gives rise to income from Ghana to notify the Commissioner-General within thirty (30) days.
Required:
State the items that must be detailed in the notification to the Commissioner-General.
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Report an error
