- 10 Marks
AT – Nov 2016 – L3 – Q1c – Tax administration in Ghana
Advise a client on VAT/NHIL issues related to credit sales, instalment payments, sale-or-return, and tax relief.
Question
c) You have been appointed as a Tax consultant in a firm in Tabora, Accra. A client approached you one month after your appointment, and asked for your advice with their business records and Value Added Tax and National Health Insurance Levy (VAT/NHIL) returns.
i) One of their customers to whom they sold goods on credit worth GH¢12,500 inclusive of VAT has gone officially bankrupt. The company had paid the VAT on the transaction three months ago.
ii) In March 2015, the client in order to boost sales started selling to customers on 12 months equal instalments payment with some small interest. He is confused as to how to determine the amount of the VAT/NHIL and when he should pay the VAT/NHIL.
iii) The company sold goods worth GH¢17,000 in March 2015, on a sale-or-return basis, but the company is not clear as to when to account for the VAT/NHIL on the sale and what happens to the VAT/NHIL paid if the customer returns the goods.
iv) The company sold stationery and office equipment worth GH¢30,000 to a Jude Power Manufacturing Company in Accra. The accountant of Jude Power informed them that their company is relieved from paying VAT/NHIL, so they will not pay.
Required:
Advise your client on issues raised in “i-iv” concerning VAT/NHIL returns. (10 marks)
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