- 10 Marks
AT – Nov 2018 – L3 – Q4a – Tax administration in Ghana
Explanation of VAT registration period and consequences of failure to register, including ethical considerations and VAT exemptions.
Question
Mr. Patapaa commenced trading on 1 April 2017 and has made the following sales:
| Period | Monthly Sales (GH¢) |
|---|---|
| April to June 2017 | 29,500 |
| July to September 2017 | 12,200 |
| October to December 2017 | 21,500 |
These figures are stated exclusive of Value Added Tax (VAT). Mr. Patapaa’s sales are all taxable activities.
As a trainee Chartered Accountant, you have advised Patapaa in writing that he should be registered for VAT, but he has refused to register because he thinks his net profit is insufficient to cover the additional cost.
Required:
i) Explain what period Mr. Patapaa was required to compulsorily register for VAT and the implications of continuing to trade after this period without registering. (2 marks)
ii) What are the sanctions for failure to register for VAT? (4 marks)
iii) Briefly explain from an ethical viewpoint the issues you, as a trainee Chartered Accountant, should consider to deal with Mr. Patapaa’s refusal to register for VAT. (2 marks)
iv) State the activities or persons that are exceptions to the normal threshold rules. (2 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Tax Ethics, Threshold Rules, VAT Compliance, VAT Penalties, VAT Registration
- Level: Level 3
- Topic: Tax administration in Ghana
- Series: NOV 2018