Topic: Income Tax Liabilities

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ATP – Aug 2020 – L2 – Q2 – Income Tax Computation

Compute Mr Paa Kwesi Arthur’s tax liability for 2019, including salary and dividend income.

Question

Mr Paa Kwesi Arthur returned to Ghana after staying in the Netherlands for over 20 years and took up an appointment with Amanfro Limited as Investment Analyst effective 1st January 2019. His gross monthly basic salary for 2019 year of assessment was GH¢12,000.00. He contributed 5.5% and 10% of his monthly basic salary to Social Security and National Insurance Trust (SSNIT) and Goodwill Pension Trust respectively.
Mr Paa Kwesi Arthur, is a widow and all his children are schooling in the Netherlands. He is only responsible for the up keep of his biological parents, who are above seventy years of age.

Mr Paa Kwesi Arthur has investments in Germany, from which he earned a gross dividend of 12,000 Euros in 2019, from which 720 Euros was withheld as dividend tax and the balance remitted to him in Ghana. There is a Double Taxation Agreement between Ghana and Germany.

The rate of Exchange is GH¢6.2 to 1.00 Euro.

Required:

a) Compute the tax liability of Mr Paa Kwesi Arthur for 2019 Year of assessment.

b) Explain the basis of your computation.

Answer

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Tags: Dividend tax, Double Taxation Agreement, Tax Basis
Level: Level 2

Topic: Income Tax Liabilities
Series: AUGUST 2020

PT – Nov 2024 – L2 – Q4b – Tax Implication of Gift under Income Tax Act

Advise on the tax implications of receiving a gift from a spouse under the Income Tax Act.

Question

Madam Tanaa is an employee of Tapoli Brewery Ghana LTD. Her husband, who is a retired staff of Tapoli Brewery LTD, gifted her a brand-new Toyota Camry costing GH¢270,000 on their 20th wedding anniversary. Madam Tanaa is worried about the tax implication of the gift and has approached you as a student learning tax at the Institute of Chartered Accountants, Ghana.

Required:
Advise Madam Tanaa on the tax implications of the gift of a Toyota Camry she received from her husband on their wedding anniversary, including the various options available to her.

Answer

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Tags: Gift tax, Income Tax, Spousal Gifts, Tax Exemptions, Tax Reliefs
Level: Level 2

Topic: Income Tax Liabilities
Series: Nov 2024

PT – Nov 2024 – L2 – Q3a – Tax Treatment of Employee Compensation

Explains the tax treatment of various types of employee compensation under the Income Tax Act, 2015 (Act 896).

Question

Describe the tax treatment of the following transactions in the context of the Income Tax Act, 2015 (Act 896).

i) Payment of GH¢2,500 salary for a casual worker in the month of Feb 2024.
ii) Payment of Bonus of GH¢32,000 to an employee with an Annual Basic salary of GH¢180,000.
iii) Payment of GH¢3,200 to a temporary worker in the month of July 2024.
iv) Payment of income to a non-resident employee in Ghana.
v) Redundancy payment to an employee.

Answer

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Tags: Bonus Taxation, Employee Compensation, Income Tax, Non-resident taxation, Redundancy
Level: Level 2

Topic: Income Tax Liabilities
Series: Nov 2024

PT – April 2022 – L2 – Q3a – Income Tax Liabilities

Explain the tax treatment for overtime allowance and bonus payments in Ghana.

Question

a) Explain the tax treatment for Overtime Allowance Payment and Bonus Payment.
(6 marks)

Answer

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Tags: Bonus payment, Employee Benefits, Income Tax, Overtime payment, Taxation

Topic: Income Tax Liabilities
Series: APR 2022

PT – April 2022 – L2 – Q3b(i & ii) – Income Tax Liabilities

Compute the tax liability on overtime allowances for Maame Agyeiwaa for January and February 2021.

Question

b) Maame Agyeiwaa is a junior staff member of KayDee Ltd. Her monthly basic salary is GH¢800. She was paid an overtime allowance totalling GH¢100 during the month of January 2021. In February 2021, Maame Agyeiwaa was paid overtime allowance totalling GH¢500.

Required:
i) Compute her tax liability on the overtime allowance for the month of January 2021.
(2 marks)

ii) Compute her tax liability on the overtime allowance payments for the month of February 2021.
(3 marks)

Answer

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Tags: Employment Income, Income Tax, Overtime payment, Tax computation

Topic: Income Tax Liabilities, Taxation of Overtime
Series: APR 2022

PT – April 2022 – L2 – Q3c – Income Tax Liabilities

Determine the tax implication of overtime allowance paid to Bawa in February 2021.

Question

c) Bawa is a junior staff member of Blinks Ltd. Her monthly basic salary is GH¢2,000. She was paid an overtime allowance totalling GH¢500 during the month of February 2021.

Required:
What is the tax implication of the overtime allowance paid?
(3 marks)

Answer

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Tags: Employee Benefits, Income Tax, Overtime payment, Taxation of income

Topic: Employment Income, Income Tax Liabilities, Taxation of Overtime
Series: APR 2022

PT – April 2022 – L2 – Q3e – Income Tax Liabilities

Calculate the tax liability on Bisa's bonus income for 2021

Question

Bisa works with Kaydei Ltd and earns an annual basic salary of GH¢140,000. He was paid a bonus of GH¢45,000 in 2021.

Required:
Determine the tax liability on the bonus.
(3 marks)

Answer

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Tags: Bonus payment, Employment Income, Individual Taxation, Tax Calculation

Topic: Income Tax Liabilities, Tax Administration
Series: APR 2022

PT – April 2022 – L2 – Q5c – Income Tax Liabilities

Explain how gifts received by individuals in relation to employment, business, or investment are taxed.

Question

Gift means a receipt without consideration or for inadequate consideration.

Answer

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Tags: Business income, Employment Income, Income Tax, Taxation of Gifts

Topic: Income Tax Liabilities, Taxation of Gifts
Series: APR 2022

PT – April 2022 – L2 – Q2d – Pension Entitlement Calculation

Compute the monthly pension entitlement of Mrs. Akoto based on her salary and months of contribution.

Question

d) Mrs. Akoto has been engaged by Madane Ltd as the Marketing Manager for 30 years on an annual salary of GH¢20,000.
The following information relates to Mrs. Akoto:
i) Throughout her working life, she earned her best salaries from Madane Ltd.
ii) She has 408 months’ contribution to her credit.
iii) She retired on 31 March 2020 at the age of 60.

Required:
Compute her monthly pension entitlement.
(5 marks)

Answer

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Tags: Pension calculation, Pension entitlement, Pension Right, Retirement

Topic: Income Tax Liabilities, Pension Calculation
Series: APR 2022

PT – Nov 2023 – L2 – Q1b – Income Tax Liabilities

Compute tax payable for resident and non-resident individuals for the 2022 year of assessment.

Question

The information below relates to individuals who earned income in the 2022 year of assessment:
Resident individuals:
Mr. Agandi and Mr. Yonny are resident employees in Ghana. The chargeable income earned per annum by Mr. Agandi and Mr. Yonny amounts to GH¢300,000 and GH¢650,000 respectively.

Non-Resident individuals:
Mrs. Zindana and Mrs. Maleda are non-resident individuals. Mrs. Zindana and Mrs. Maleda have earned chargeable incomes to the tune of GH¢300,000 and GH¢650,000 per annum respectively.

Required:
Compute their respective taxes payable for the 2022 year of assessment.

Answer

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Tags: Income Tax, Non-Resident Individuals, Resident Individuals, Tax computation
Level: Level 2

Topic: Income Tax Liabilities
Series: NOV 2023

ATP – Aug 2020 – L2 – Q2 – Income Tax Computation

Compute Mr Paa Kwesi Arthur’s tax liability for 2019, including salary and dividend income.

Question

The rate of Exchange is GH¢6.2 to 1.00 Euro.

Required:

a) Compute the tax liability of Mr Paa Kwesi Arthur for 2019 Year of assessment.

b) Explain the basis of your computation.

Answer

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Tags: Dividend tax, Double Taxation Agreement, Tax Basis
Level: Level 2

Topic: Income Tax Liabilities
Series: AUGUST 2020

PT – Nov 2024 – L2 – Q4b – Tax Implication of Gift under Income Tax Act

Advise on the tax implications of receiving a gift from a spouse under the Income Tax Act.

Question

Required:
Advise Madam Tanaa on the tax implications of the gift of a Toyota Camry she received from her husband on their wedding anniversary, including the various options available to her.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Gift tax, Income Tax, Spousal Gifts, Tax Exemptions, Tax Reliefs
Level: Level 2

Topic: Income Tax Liabilities
Series: Nov 2024

PT – Nov 2024 – L2 – Q3a – Tax Treatment of Employee Compensation

Explains the tax treatment of various types of employee compensation under the Income Tax Act, 2015 (Act 896).

Question

Describe the tax treatment of the following transactions in the context of the Income Tax Act, 2015 (Act 896).

Answer

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Tags: Bonus Taxation, Employee Compensation, Income Tax, Non-resident taxation, Redundancy
Level: Level 2

Topic: Income Tax Liabilities
Series: Nov 2024

PT – April 2022 – L2 – Q3a – Income Tax Liabilities

Explain the tax treatment for overtime allowance and bonus payments in Ghana.

Question

a) Explain the tax treatment for Overtime Allowance Payment and Bonus Payment.
(6 marks)

Answer

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Tags: Bonus payment, Employee Benefits, Income Tax, Overtime payment, Taxation

Topic: Income Tax Liabilities
Series: APR 2022

PT – April 2022 – L2 – Q3b(i & ii) – Income Tax Liabilities

Compute the tax liability on overtime allowances for Maame Agyeiwaa for January and February 2021.

Question

Required:
i) Compute her tax liability on the overtime allowance for the month of January 2021.
(2 marks)

ii) Compute her tax liability on the overtime allowance payments for the month of February 2021.
(3 marks)

Answer

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Tags: Employment Income, Income Tax, Overtime payment, Tax computation

Topic: Income Tax Liabilities, Taxation of Overtime
Series: APR 2022

PT – April 2022 – L2 – Q3c – Income Tax Liabilities

Determine the tax implication of overtime allowance paid to Bawa in February 2021.

Question

c) Bawa is a junior staff member of Blinks Ltd. Her monthly basic salary is GH¢2,000. She was paid an overtime allowance totalling GH¢500 during the month of February 2021.

Required:
What is the tax implication of the overtime allowance paid?
(3 marks)

Answer

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Tags: Employee Benefits, Income Tax, Overtime payment, Taxation of income

Topic: Employment Income, Income Tax Liabilities, Taxation of Overtime
Series: APR 2022

PT – April 2022 – L2 – Q3e – Income Tax Liabilities

Calculate the tax liability on Bisa's bonus income for 2021

Question

Bisa works with Kaydei Ltd and earns an annual basic salary of GH¢140,000. He was paid a bonus of GH¢45,000 in 2021.

Required:
Determine the tax liability on the bonus.
(3 marks)

Answer

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Tags: Bonus payment, Employment Income, Individual Taxation, Tax Calculation

Topic: Income Tax Liabilities, Tax Administration
Series: APR 2022

PT – April 2022 – L2 – Q5c – Income Tax Liabilities

Explain how gifts received by individuals in relation to employment, business, or investment are taxed.

Question

Gift means a receipt without consideration or for inadequate consideration.

Answer

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Tags: Business income, Employment Income, Income Tax, Taxation of Gifts

Topic: Income Tax Liabilities, Taxation of Gifts
Series: APR 2022

PT – April 2022 – L2 – Q2d – Pension Entitlement Calculation

Compute the monthly pension entitlement of Mrs. Akoto based on her salary and months of contribution.

Question

Required:
Compute her monthly pension entitlement.
(5 marks)

Answer

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Tags: Pension calculation, Pension entitlement, Pension Right, Retirement

Topic: Income Tax Liabilities, Pension Calculation
Series: APR 2022

PT – Nov 2023 – L2 – Q1b – Income Tax Liabilities

Compute tax payable for resident and non-resident individuals for the 2022 year of assessment.

Question

Required:
Compute their respective taxes payable for the 2022 year of assessment.

Answer

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Tags: Income Tax, Non-Resident Individuals, Resident Individuals, Tax computation
Level: Level 2