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QUESTION 1
Kwesi Orlando has been the Director of Operations of Fine Arts Limited since July 2004 on a
consolidated salary of GHS45,000 per annum. He contributes 5% of his salary to the Social
Security Scheme.
In his returns for the year of assessment 2009, he declared gross interest of GHS3,000 from his
investments in the United Kingdom. Tax deducted was GHS300.
Required:
a. Compute Mr. Orlando's net tax liabilit y in Ghana. (16 arks)
b. Apart from the United Kingdom, mention the other countries with which Ghana has
double taxation agreements.
(4 marks)
(Total: 20 marks)
Rates of Tax:
240 free
240 ... 5%
1,200 ... 10%
7,920 17.5%
Exceeding 9,600 ... 25%
QUESTION 2
Sakato Insurance Company Limited has been in business for several years making accounts to
31St March each year.
Below are extracts from the accounts for the year ended 31st March, 2009.
Page 1 of 4
GHS
Gross premiums received 68,100
General administrative expenses 10,896
Commissions to agents 480
Claims settled and paid 24,600
Re-insurance recoveries 16,000
Re-insurance premiums paid 8,000
Premiums returned 3,600
Dividends received 18,400
Interest on Treasury bills 32,000
Capital allowance claimed 25,474
Notes
1. Reserve for unexpired risk is at 40%
2. Reserve for the previous year is GHS34,000
3. The company undertakes general Insurance business
Required:
(a) Determine the taxabl e income of the com pan y. (15 marks)
(b) What would be the company's taxable income if it were in Life Insurance?
(5 marks)
(Total: 20 marks)
QUESTION 3
Mr. Reginald Bolt, a non-resident ship operator submitted the following accounts for the year
ended September 30, 2009.
OHS GHS
Proceeds from passengers who embark 1,100,000
Proceeds from mail, goods embarked 210,000
Proceeds from transshipment 290,000
Proceeds from Hotel Serene (Net) 500,000
2,100,000
Page 2 of 4
Less Expenses:
Salaries and wages 320,000
Bank charges 2,500
Audit fees 1,000
Administrative expenses 128,000
Depreciation 46,000 497,500
Net profit 1,602,500
Note: Capital allowance available to the shipping operations is GHS272,000.
Required:
i. Compute the tax payable by Mr. Bolt; and (10 marks)
ii. Explain fully your computation. (10 marks)
(Total: 20 marks) QUESTION 4
a. Kwashie Ocran, a trader operating at the Accra Business Centre, intends to import some
goods from the United Kingdom for resale.
Required:
Advise Mr. Ocran on how goods imported into the country are valued for customs purposes.
(10 marks)
b. "Businesses that make only exempt supplies cannot register for VAT".
Required:
Comment on the statement above, giving any five (5) examples of goods or services that are
exempt.
(10 marks)
(Total: 20 marks)
Page 3 of 4
QUESTION 5
Jones Handle was seconded to Ghana from the Soil Scientists Institute in Britain as a consultant
agronomist to Fadama Farms Limited for a period of 15 months (fifteen months) commencing
from 1st October, 2007.
His conditions of service were as follows:
GHS
i. Salary 72,000 p.a.
ii. Expatriate allowance 24,000 p.a.
iii. Risk allowance 12,000 p.a.
iv. Professional allowance 12,000 p.a.
In addition, he was provided with a furnished bungalow and a chauffeur-driven Toyota Pick-up
vehicle at the farm. He was also provided with a cook, househelp, security man and a garden
assistant all of whom were paid GHS400 each a month.
He does not contribute to the Social Security Scheme.
Jones Handle, in his own free time, set up an experimental farm producing snails. This proved to
be very lucrative as it was a delicacy in the area. For the year ended 31 st December, 2008 he
earned GHS28,000.
Required:
(a) Determine his chargeable income, if any, during his stay in the country, stating the basis
periods and the relevant years of assessment.
(b) Produce the related notes guiding your determination.
(14 marks)
(6marks)
(Total: 20 marks)
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