Topic: Tax Administration

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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.

Answer

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Tags: Commissioner-General Notification, Income Tax Act, Non-resident taxation, Tax Compliance, Withholding Tax
Level: Level 2

Topic: Tax Administration
Series: Nov 2024

PT – Nov 2024 – L2 – Q2e – Tax Audit and Under-declaration of Sales

Action to be taken regarding an under-declared sales revenue during a tax audit.

Question

You have been engaged as an Accounts Officer in Abokobi LTD. Sales of GH¢10,000,000 were inadvertently under-declared. A team from the Ghana Revenue Authority (GRA) is at your premises conducting an audit. The GRA Audit Team did not review the sales revenue. After the audit, you noted that the amount constituting the under-declaration of the sales was mistakenly credited to the suppliers’ account in the ledger.

Required:

Detail out your position on the above as to what action to take.

Answer

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Tags: Financial Ethics, Financial Reporting, Ghana Revenue Authority (GRA), Tax Audit, Tax Compliance, Tax Penalty, Tax Regulations, Under-declared Sales
Level: Level 2

Topic: Tax Administration
Series: Nov 2024

Principles of Taxation – Nov 2024 – L2 – Q2c – Withholding VAT Scheme

Explanation of the objectives of the Withholding VAT Scheme.

Question

One of the innovative measures introduced by the Ghana Revenue Authority (GRA) is the Withholding VAT Scheme, designed to enhance tax compliance.

Required:
Describe FOUR objectives of the Withholding VAT Scheme.

Answer

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Tags: Revenue Collection, Tax Administration, VAT Compliance, Withholding VAT
Level: Level 2

Topic: Tax Administration
Series: Nov 2024

PT – Nov 2024 – L2 – Q2a – Integration of Revenue Agencies into GRA

Explanation of the benefits resulting from the consolidation of revenue agencies into GRA.

Question

In 2009, the former revenue agencies (VAT, IRS, and CEPS) were consolidated into the Ghana Revenue Authority (GRA). This integration was anticipated to provide certain benefits to both taxpayers and the overall tax administration.

Required:

State FOUR benefits resulting from the integration of the revenue agencies into the GRA

Answer

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Tags: Ghana Revenue Authority, Revenue Agencies Integration, Tax Administration, Tax Compliance
Level: Level 2

Topic: Tax Administration
Series: Nov 2024

PT – Nov 2024 – L2 – Q1b – Tax Decisions and Objections

Explanation of tax decisions and conditions under which objections to tax decisions are valid.

Question

b) Tax decisions by the Commissioner-General can lead to tax disputes. The taxpayer can object to a tax decision. Objection constitutes an inalienable right a taxpayer can exercise in any tax administration environment.

Required:

i) When do we say that the Commissioner-General has taken a tax decision?

ii) State FOUR circumstances under which an objection to a tax decision is considered valid before the Commissioner-General can act on it.

iii) What are the options available to the Commissioner-General when he receives an objection from a taxpayer?

Answer

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Tags: Commissioner-General, Compliance, Tax Decisions, Tax Objection, Taxpayer Rights
Level: Level 2

Topic: Tax Administration
Series: Nov 2024

PT – April 2022 – L2 – Q1a – Income Tax Liabilities

Explain taxation principles for resident and non-resident individuals.

Question

a) Explain the taxation principles of the following:

i) Resident individual
ii) Non-resident person
(5 marks)

Answer

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Tags: Ghana tax system, Global income, Non-resident person, Resident Individual, Taxation principles

Topic: Resident and Non-Resident Taxation, Tax Administration
Series: APR 2022

PT – April 2022 – L2 – Q2a – Value Added Tax (VAT)

Describe activities under VAT that do not require meeting the threshold rule before registration is done.

Question

a) Meeting the threshold is a requirement for VAT registration. Others may come under voluntary registration. However, certain activities must be registered despite the above rules.

Required:
Describe activities under VAT, which do not require meeting the threshold rule before registration is done.
(9 marks)

Answer

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Tags: Auctioneer, Promoter of public entertainment, Threshold rule, VAT exceptions, VAT Registration

Topic: Tax Administration, Value-Added Tax (VAT)
Series: APR 2022

PT – April 2022 – L2 – Q2c – Value Added Tax (VAT)

Explain what compulsory VAT registration entails under the VAT Act.

Question

c) What is Compulsory Registration under the types of VAT registration?
(2 marks)

Answer

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Tags: Compulsory registration, Ghana VAT Act, VAT enforcement, VAT Registration

Topic: Tax Administration, Value-Added Tax (VAT)
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 – Q1c – Tax Administration

Calculate the taxes payable for each quarter for Bumu Manufacturing Company based on estimated chargeable income and tax paid.

Question

c) You have been offered an appointment by Bumu Manufacturing Company (BMC) as Tax Manager responsible for preparing and filing tax returns on behalf of the company. BMC files its returns with the Osu Medium Taxpayers Office of the Ghana Revenue Authority. The company’s Tax Identification Number is C0000261178. The company prepares accounts to 31 December each year.

BMC estimated its chargeable income for the 2019 year of assessment as GH¢3,000,000. Subsequently, the company secured a Government contract and anticipates in the third (3rd) quarter that its chargeable income would be GH¢4,500,000.

Additional Information:
Tax paid on account:
1st quarter GH¢100,000
2nd quarter GH¢120,000
3rd quarter GH¢200,000

Required:
Compute the taxes payable for BMC for each quarter.
(10 marks)

Answer

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Tags: chargeable income, Corporate Tax, Quarterly tax payment, Tax identification number, Tax return filing

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

PT – Nov 2023 – L2 – Q1a – Tax Administration

Outline the procedures for obtaining an extension for filing corporate tax returns.

Question

The Managing Director of Atadeka Ltd has been informed that you are undertaking a course in taxation at the Institute of Chartered Accountants, Ghana and has sought your advice on the procedures for extension of time to file the company’s Corporate Tax Returns.

Required:
Outline the procedures for extension of time to file tax returns to the Managing Director.

Answer

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Tags: Corporate Tax Returns, Tax Administration, Tax Filing
Level: Level 2

Topic: Tax Administration
Series: NOV 2023

PT – Nov 2023 – L2 – Q1c – Overview of the Ghanaian Tax System and Fiscal Policy

State five functions performed by the Ghana Revenue Authority.

Question

Ghana Revenue Authority has been charged to perform certain functions as enacted by Ghana Revenue Authority Act, 2009 (Act 791).

Required:
State FIVE (5) functions performed by Ghana Revenue Authority.

Answer

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Tags: Ghana Revenue Authority, Tax Administration, Tax Functions
Level: Level 2

Topic: Tax Administration
Series: NOV 2023

PT – Nov 2023 – L2 – Q1d – Income Tax Liabilities

Outline the sanctions imposed for failure to file tax returns.

Question

Tax administration encompasses assessment, collection, and enforcement of taxes legally due to the state. The enforcement of tax obligations requires an imposition of penalties and interest charges for non-compliance.

Required:
State the sanctions for failing to file tax returns.

Answer

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Tags: Non-compliance, Penalties, Tax Administration, Tax Filing
Level: Level 2

Topic: Tax Administration
Series: NOV 2023

PT – Nov 2019 – L2 – Q1c – Corporate Tax Liabilities

Determines the amount of tax underpayment for Naab Ltd to be subjected to interest computation.

Question

c) The following data is relevant to Naab Ltd tax affairs for 2018 year of assessment:

Self-assessment returns submitted:

Tax paid on self-assessment: GH¢1,000,000
Chargeable income: GH¢4,000,000
Actual Returns submitted:

Chargeable Income: GH¢6,000,000
Correct amount – Tax payable: GH¢1,500,000

Required:
What is the amount of tax underpayment to be subject to interest computation?
(2 marks)

Answer

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Tags: Interest Computation, Self Assessment., Tax Liability, Tax Underpayment
Level: Level 2

Topic: Tax Administration
Series: NOV 2019

PT – Nov 2019 – L2 – Q1b – Tax Administration

Describes the essential elements included in a tax assessment notice issued by the Commissioner-General.

Question

b) The only tool for communicating a tax liability to a taxpayer is through a notice of assessment.

Required: What are the elements of a notice of tax assessment?
(8 marks)

Answer

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Tags: Notice of Assessment, Tax Assessment, Tax Liability, Taxpayer
Level: Level 2

Topic: Tax Administration
Series: NOV 2019

PT – May 2020 – L2 – Q1d – Tax Administration

Defines what constitutes a tax return.

Question

What constitutes a Tax Return?
(2 marks)

Answer

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Tags: Income Reporting, Tax Administration, Tax Return
Level: Level 2

Topic: Tax Administration
Series: MAY 2020

PT – May 2020 – L2 – Q1c – Tax Administration

This question outlines the conditions that must be met by a company before the Commissioner-General can make a determination on a tax objection.

Question

Knaah-Shormeh Ltd has to settle Ghana Revenue Authority on the following tax liabilities:

Tax Liabilities Amount (GH¢)
Custom duties 1,000,000
Withholding Tax Surcharge 80,000
Value Added Tax 500,000
Corporate Tax 100,000
Total Liability 1,680,000
Additional Information:

50% of the Value Added Tax relates to imports.
The above came about from an adjusted assessment through an audit conducted and a report submitted on 31 January 2019.
The company has engaged Miracle Consultants, a firm of Tax Practitioners, to help it object to the assessment, claiming it is excessive and erroneous based on its facts and circumstances.
Required:
What conditions must be met by Knaah-Shormeh Ltd before the Commissioner-General makes a determination on the objection? (8 marks)

Answer

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Tags: Corporate Tax, Ghana Revenue Authority, Tax Administration, Tax Objection
Level: Level 2

Topic: Tax Administration
Series: MAY 2020

PT – March 2023 – L2 – Q5a – Tax Administration

State the transactions that require the use of a Tax Clearance Certificate (TCC).

Question

In 2021, the Ghana Revenue Authority migrated fully to an online portal for the filing and payment of taxes. One process included in this migration was the obtainment of a Tax Clearance Certificate (TCC), which plays an important role in tax compliance.

Required:

State SIX (6) transactions that require the use of a TCC.

Answer

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Tags: Compliance, Tax Administration, Tax Clearance Certificate, TCC
Level: Level 2

Topic: Tax Administration
Series: MAR 2023

PT – March 2023 – L2 – Q2d – Tax Administration

Explain the three-tier pension scheme under the National Pensions Act.

Question

Explain the three-tier pension scheme under the National Pensions Act, 2008 (Act 766).

Answer

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Tags: National Pensions Act, Pension Scheme, Taxation of Pensions, Three-Tier Pension
Level: Level 2

Topic: Tax Administration
Series: MAR 2023

PT – March 2023 – L2 – Q1c – Tax Administration

Explain the process for objecting to the Commissioner-General’s tax decision.

Question

A taxpayer is not satisfied with the Commissioner-General’s tax decision.

Required:

Explain the procedure to be followed in objecting to the Commissioner-General’s tax decision.
(10 marks)

Answer

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Tags: Appeals, Commissioner-General, Objection Procedure, Tax Decision
Level: Level 2