- 8 Marks
AT – Nov 2019 – L3 – Q4a – Tax administration in Ghana
Determine the tax obligations of an NGO involved in both charitable activities and business operations.
Question
Scenario:
Bubandushe is a Non-Governmental Organisation (NGO) located in Accra with operational areas in the Northern Regions of Ghana. The NGO buys rice from a supermarket in Accra and transports it to the Northern Regions for distribution to widows and orphans. Its main source of funding is from a benefactor based in the Netherlands, who has been supporting the project since its inception.
In support of its operations, it engaged Chartered Accountants from the Institute of Chartered Accountants (Ghana) as employees. Their role is basically to organize training programmes for Government Institutions on budget preparation using advanced financial models for a fee. This additional source of income equally supports the operations of this NGO.
Ghana Revenue Authority (GRA) has written to this NGO to regularize its operations with it for tax purposes. The Management of the NGO has argued that it is exempt from tax on its income. The management has written to you to offer professional help on the matter.
Required:
i) Determine whether the NGO is required under the tax laws to pay tax and if yes, what type of taxes. (6 marks)
ii) On what basis are NGOs liable to tax or exempt? (2 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Charitable Organizations, Corporate Tax, NGO Taxation, Withholding Tax
- Level: Level 3
- Topic: Tax administration in Ghana
- Series: NOV 2019