Reliefs – NBC Institute

AT – May 2017 – L3 – Q2 – Business income – Corporate income tax

Compute the chargeable income, explain adjustments, and compute tax payable for a self-employed individual.

Question

Mr. George Amoako, a self-employed single parent with two children attending a private University in Ghana trades as George Amoako Enterprise. He commenced business on 1st January 2016 and submitted the following extracts of his financial statements for the year ended 2016:

Item	Amount (GH¢)
Gross Profit b/d	20,420
Interest on savings account	2,020
Gifts received	1,500
Interest on treasury bills	790
Auditor’s fees	800
Depreciation of assets	1,200
Computers purchased	2,500
PAYE paid on his personal salary	450
Employee social security contribution (other staff)	396
Office rent	2,400
Personal salary (net)	7,200
Other staff wages	4,300
Stationery	852
Vehicle purchased for CEO’s personal use	18,000
Transport	1,300
Net Loss	(14,668)
Total	24,730

Required:

a) Determine the Chargeable Income of Mr. George Amoako for 2016 year of assessment. (10 marks)

b) Support your computations with relevant explanations. (5 marks)

c) Compute all Taxes payable. (5 marks)

(Total: 20 marks)

Answer

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Tags: chargeable income, Reliefs, Self-employed, Tax computation, Taxable Income
Level: Level 3

Topic: Business income - Corporate income tax
Series: MAY 2017

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

Question

Mr. Frank Danso was employed by Ghana Trust Ltd on 1st September 2010 on a salary scale of GH¢4,500 x 500-7,500 as the financial controller of the company. He is provided with the following as part of his conditions of service for the 2014 Year of Assessment:

i) Well-furnished rented flat by his employers in respect of which he pays GH¢100 per month as rent by way of deductions at source.
ii) Watchman allowance of GH¢200 per annum, paid directly to Mr. Frank Danso.
iii) Risk allowance of GH¢905 per annum.
iv) Leave allowance of GH¢500 per annum.
v) Garden boy allowance of GH¢100 per quarter paid directly to Mr. Frank Danso.
vi) Medical allowance of GH¢680 per annum.
vii) Meals allowance of GH¢50 per month.
viii) Two maidservants each on wages of GH¢200 per annum. The amount is paid to the maid servants directly by the company.
ix) Bonus of 40% on annual basic salary.
x) Entertainment allowance of GH¢400 a year (accountable).
xi) Duty post allowance of GH¢100 per month.
xii) He has Life Assurance Policies with EIC Ltd. Below are the details:

Policy	Sum Assured (GH¢)	Annual Premium (GH¢)
A	4,000	420
B	2,800	240
C	16,000	1,650
D	5,000	525

xiii) He is entitled to a company car and fuel for both official and private use.
xiv) He has two wives and ten children; four of whom are in SHS in Accra, and the rest are gainfully employed; he caters for 3 of his aged relatives.
xv) He contributes 7% of his salary towards the company’s Provident Fund which has been approved by the National Pension Authority, and he also contributes 5.5% of his salary to the SSNIT.

Required:
a) Compute his tax liabilities for the 2014 Year of Assessment using 2014 rates.
(15 marks)

b) Determine his take-home pay for the 2014 Year of Assessment.
(5 marks)

Total: 20 marks

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Provident fund, Reliefs, Take-home pay, Tax computation, Tax liabilities
Level: Level 3

Topic: Business income - Corporate income tax, Tax administration in Ghana
Series: MAY 2016

AT – May 2017 – L3 – Q2 – Business income – Corporate income tax

Compute the chargeable income, explain adjustments, and compute tax payable for a self-employed individual.

Question

Item	Amount (GH¢)
Gross Profit b/d	20,420
Interest on savings account	2,020
Gifts received	1,500
Interest on treasury bills	790
Auditor’s fees	800
Depreciation of assets	1,200
Computers purchased	2,500
PAYE paid on his personal salary	450
Employee social security contribution (other staff)	396
Office rent	2,400
Personal salary (net)	7,200
Other staff wages	4,300
Stationery	852
Vehicle purchased for CEO’s personal use	18,000
Transport	1,300
Net Loss	(14,668)
Total	24,730

Required:

a) Determine the Chargeable Income of Mr. George Amoako for 2016 year of assessment. (10 marks)

b) Support your computations with relevant explanations. (5 marks)

c) Compute all Taxes payable. (5 marks)

(Total: 20 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: chargeable income, Reliefs, Self-employed, Tax computation, Taxable Income
Level: Level 3

Topic: Business income - Corporate income tax
Series: MAY 2017

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

Question

Policy	Sum Assured (GH¢)	Annual Premium (GH¢)
A	4,000	420
B	2,800	240
C	16,000	1,650
D	5,000	525

Required:
a) Compute his tax liabilities for the 2014 Year of Assessment using 2014 rates.
(15 marks)

b) Determine his take-home pay for the 2014 Year of Assessment.
(5 marks)

Total: 20 marks

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Provident fund, Reliefs, Take-home pay, Tax computation, Tax liabilities
Level: Level 3

Topic: Business income - Corporate income tax, Tax administration in Ghana
Series: MAY 2016

Question Tag: Reliefs

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AT – May 2017 – L3 – Q2 – Business income – Corporate income tax

Compute the chargeable income, explain adjustments, and compute tax payable for a self-employed individual.

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

AT – May 2017 – L3 – Q2 – Business income – Corporate income tax

Compute the chargeable income, explain adjustments, and compute tax payable for a self-employed individual.

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

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AT – May 2017 – L3 – Q2 – Business income – Corporate income tax

Compute the chargeable income, explain adjustments, and compute tax payable for a self-employed individual.

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AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

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AT – May 2017 – L3 – Q2 – Business income – Corporate income tax

Compute the chargeable income, explain adjustments, and compute tax payable for a self-employed individual.

You're reporting an error for "AT – May 2017 – L3 – Q2 – Business income – Corporate income tax"

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

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