- 9 Marks
AT – Nov 2015 – L3 – Q1a – Taxation and Fiscal Policy
Explaining tax loss carryover provisions and determining the applicability for LOBILO Limited.
Question
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 shortchanged 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 further added 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 the 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.
Find Related Questions by Tags, levels, etc.
- Tags: Corporate Taxation, Ghana tax law, Tax incentive, Tax loss carryover
- Level: Level 3
- Topic: Tax administration in Ghana
- Series: NOV 2015