- 10 Marks
AT – Dec 2023 – L3 – Q5a – Tax administration in Ghana
Discussing the circumstances where withholding tax applies on payments and identifying transactions that are exempt from withholding tax.
Question
Lakeside Exploration Ghana Ltd and Gasoil Energy Extraction Ltd are joint venture
partners who have 50% and 35% interest respectively in the Volta Offshore Field Ghana
Ltd. The agreement between the joint venture partners and the Government of Ghana
provides for Royalty of 5%, Initial Carried Interest of 10%, Additional Participating
Interest of 5%, and corporate tax rate of 35%.
Production commenced in the Volta Offshore Field Ghana Ltd in 2021. Information
available on the Volta Offshore Field Ghana Ltd is as follows:
Exploration Costs GH¢500,000,000
Development Cost GH¢4,000,000,000
Average production cost per barrel GH¢10
Average Price of crude oil per barrel GH¢50
Actual oil Production in 2021 100,000,000 barrels
Required:
i) State FOUR (4) payments or transactions on which withholding tax is applicable.
ii) Identify FOUR (4) payments or transactions that are exempt from withholding tax.
Find Related Questions by Tags, levels, etc.
- Tags: Tax Administration, Tax Exemptions, Tax payments, Withholding Tax
- Level: Level 3
- Topic: Tax administration in Ghana
- Series: DEC 2023