Q1 (Nov 2012 Q1)

(a) Mr. Jonas Abudu, an aspiring Member of Parliament for the Adjenkotoku Constituency sold
one of his buildings for GHC75,000 to boost his campaign in March, 2012. He deposited
GHC50,000 in a fixed deposit and GHC25,000 in his current account all at the ABC Bank in
Accra.

The cost of construction of the building in 2008 was GHC38,000. Apart from a fence wall
and iron gate constructed in 2009 at a cost of GHC8,000 no other development has been
made on the property.

So much engrossed in his campaign activities, he requires you to deal with the Ghana
Revenue Authority on his behalf so that he can get his Tax Clearance Certificate.
Required:

Outline your approach to address this request. (8 marks)

(b) (Nov 2015 Q1a)

The Chief Executive Officer of LOBILO Limited, producers of Alata Local Soap for the Ghanaian market,
returned from a Tax Seminar organized by The Institute of Chartered Accountants, Ghana (ICAG) and
called you, the Tax Manager of LOBILO into his office and stated LOBILO Company Limited has been
short changed over the years on account of tax losses. He said that carryover of losses as an incentive was
discussed at length at the Tax Seminar. He went further to add that, LOBILO Limited has not carried over
its tax losses as provided for in the tax laws. He states ,Tax Manager, please act now by writing to Ghana
Revenue Authority to recognize the tax losses of LOBILO, since the losses are within the five years in order
to help reduce the taxes of the Company now that the Company is making profits, he ended.
You are required to:
Explain clearly the provision of tax laws on carryover of losses and to what extent do you agree with the
position of the Chief Executive Officer of LOBILO Company Limited?
(9 marks)

QUESTION 2 (May 2013 Q4)

a) Mention and discuss the two (2) main processes by which tax disputes are resolved under the
Internal Revenue Act 2000 (Act 592). (4 marks)

b) In each of the scenarios below, state whether or not the expenditure will be allowed as
deduction from the business income of sole trader and why.
i. Rent for accommodation hired for the managing proprietor
ii. Penalty for not filing tax returns on time
iii. Cost of goods withdrawn by the proprietor

iv. Payment to the local authority in respect of rates

v. Cost of air ticket incurred for the medical treatment of the mother of the proprietor.(5 marks)

c) (Nov 2014 Q2)

Miseho Company Ltd, a self-assessed tax payer with the Large Taxpayer Office (LTO) of the Ghana Revenue
Authority estimated its chargeable income for the assessment year 2013 to be GH30,000,000. The company
commissioned a new plant in April 2013 and realized that its production capacity has improved significantly and
hence revised its estimated chargeable income to GH50,000,000 in May 2013.
In November the same year after the third quarter interim accounts, the Directors were advised by the Auditors to
adjust their chargeable income to avoid an imposition of a penalty by the LTO. This was adhered to and
subsequently revised the estimate further to GH75,000,000.
The company submitted its 2013 annual returns on due date of 30 th April 2014 and posted actual chargeable
income of GH130,000,000.

Required:
(a) Compute the installment payment for the four (4) quarters in the assessment year 2013.
(16 marks)

(b) Compute any penalty payable by the company. (4 marks)

(c) Determine the outstanding tax payable by the company assuming all the installment payments were made on
due date. (4 marks)
(Total: 24 marks)

Please note the following:

(i) The companys basis period is 1st January to 31st December.

(ii) The corporate tax rate is 25%

Question 3
a) (Nov 2015 Q2c)
Ghana Revenue Authority has embarked on comprehensive reforms geared towards Voluntary Tax
Compliance. Among the reforms include requesting tax payers to determine their tax liabilities and
consequently the tax payable. This has roundly been criticized by some taxpayers as increasing cost of
compliance or doing business. You have been engaged by the Ministry of Finance to help Ghana Revenue
Authority educate taxpayers on these reforms.
You are required to explain to taxpayers:
i) Self Assessment Tax Regime (2 marks)

ii) Critically examine the benefits taxpayers stand to derive from Self-Assessment Regime that has become
part of tax administration in Ghana (3 marks)

b) (Nov 2015 Q2a)

Capital Allowance is an incentive granted to all persons in business and investment. They are,
however, granted upon fulfillment of certain conditions.

Required: Explain fully the conditions under which GRA may grant Capital Allowance to a person

c) (Nov 2015 Q3c)

Kwame Patapaa has written in his Will that a parcel of land located in Kasoa should be given to his
friend Adongo Muda upon his death in his Will.He is, however, not sure of the tax implication on
this transaction and has approached you for assistance in this direction.

Required:
Detail out your response to this question (3 marks)
QUESTION (Nov 2014 Q1)

(a) Zacky Company Limited has approached you to assist their company to comply with the Value Added Tax
regime in Ghana. They have asked you specifically to assist in the area of VAT Returns and Payment of the
related tax.

Required:
Advise the company on the related requirements and what is expected of them as a VAT trader with respect to
VAT returns and date of payment of the tax.
(12 marks)

(b) A person with turnover below the registrable level could apply voluntarily to the Commissioner- General to
be registered as a taxable person.

Required:
Outline the circumstances where the Commissioner General could refuse the request to register.
(6 marks)

QUESTION 5 (Nov 2012 Q5)

Kawado Company Limited, manufacturers of cotton wool for export only, commenced business on
st th
1 February, 2009 and submitted its first set of accounts for the period ended 30 September, 2010.

Below are the details:-

GHC GHC
Gross profit b/f 450,000
Add Dividend Received 3,100
Profit on sale of fixed assets 48,500 51,600
 501,600
Less Expenses
Salaries and Wages 146,000
Directors Remuneration 52,000
Electricity and Water 31,500
Printing and Stationery 8,200
Adverts & Publicity 23,700
Telephone and Postage 800
Repairs & Maintenance (Plant & Equipment) 60,000
Repairs & Maintenance (Office & Equipment) 6,500
Insurance 13,800
Registration and Licence 16,200
Depreciation 108,000
Business Promotion and Entertainment 16,000
Legal Fees 8,000
Penalties and Fines 4,200 494,900
Net Profit 6,700
Notes to the accounts:

1. Adverts and Publicity (23,700)

GHC
Radio and Television 7,200
Daily Graphic 2,300
Permanent signboard at entrance of factory 14,200
23,700

2. Repairs & Maintenance (Plant & Equipment (60,000)

Installation of machine 21,500
General Maintenance 18,000
New standing generator 20,500
60,000

3. Business Promotion & Entertainment (16,000)

Entertainment (Opening of factory) 13,500
Sample products to invited guests 2,500
16,000
4. Legal Fees (8,000)
GHC
Formation of company 6,400
Litigation on plot of land 1,600
8,000
The companys business assets are made up as follows:
 Types of Asset Date of Acquisition Cost (GHC)
i. Factory Building January, 2009 230,000
ii. Plant & Machinery March, 2009 171,000
iii. Generators June, 2010 20,500
iv. Office Building May, 2009 106,000
v. Delivery Van September, 2009 40,000
vi. Toyota Pick-up April, 2010 36,000

Required:

Compute the companys chargeable income for all relevant years.

20marks