Question Tag: VAT

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 10 Marks

AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility

Determine the deductible input VAT for a VAT-registered company operating multiple business divisions under different VAT treatments.

The two scenarios below relate to ClearTel LTD, a VAT-registered company in Ghana. Each scenario is an independent scenario and should be considered separately.

Scenario 1

ClearTel LTD operates three divisions (XYZ). Division X deals in the sale of computers and mobile phones. Division Y deals in the sale of locally-manufactured sanitary towels. Division Z is into the supply of fertilizers to farmers in Ghana.

Revenue from each division for 2024 is shown below:

Division Description Revenue (GH¢)
X Computers and mobile phones 1,005,700
Y Sale of locally-manufactured sanitary towels 2,500,000
Z Supply of fertilizers to farmers 78,800,000

ClearTel LTD has incurred total input VAT of GH¢50,500,000, and the Finance Manager of the company is unable to determine specifically which division of the business this input VAT amount relates to.

Required:

Determine the amount of input VAT ClearTel LTD can deduct, in line with the provisions of the Value Added Tax Act, 2013 (Act 870 as amended). Justify your answer

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – Nov 2024 – L3 – Q4a – Value Added Tax Deductibility"

  • 5 Marks

PT – Nov 2024 – L2 – Q5b – Withholding Tax & VAT Calculation

Compute VAT and direct tax withheld on a taxable supply of medical consumables to a tax withholding agent.

Charley Chemist LTD made a taxable supply of medical consumables amounting to GH¢750,000 exclusive of VAT and levies on 23 November 2023 to the University of Ghana Medical Centre. The University of Ghana Medical Centre is a withholding tax agent for both VAT withholding and Direct Tax withholding.

Required:
i) Compute the amount of VAT withheld by the University of Ghana Medical Center. 
ii) Compute the amount of direct tax withheld by the University of Ghana Medical Centre.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PT – Nov 2024 – L2 – Q5b – Withholding Tax & VAT Calculation"

  • 15 Marks

AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance

Analyze the tax implications for Yemmysea Beverages Limited’s proposed merger and acquisition arrangements, covering scenarios where a company absorbs another, a merger results in business cessation, and a business is sold or transferred. Additionally, explain the regulatory powers of the FIRS in mergers and acquisitions.

In its bid to increase market power, growth, and enhance operating economies, the Board of Directors of a medium-sized beverage company, Yemmysea Beverages Limited, located in Abeokuta, is considering proposals for a merger or acquisition with another business entity in the same industry. The Chairman of the Board found all the proposals attractive.

However, the Financial Accountant advised that the Board should consider the tax implications associated with each proposed merger or acquisition arrangement. To address this, a reputable tax consulting firm, experienced in mergers, acquisitions, and reorganizations, was recommended to provide expert analysis.

Your firm has now been approached to offer professional advice on the tax implications of each of the following merger or acquisition arrangements:

  • Proposal 1: When an existing company absorbs another existing company.
  • Proposal 2: When a merger results in the cessation of business.
  • Proposal 3: When a business is sold or transferred.

Required:

As the company’s Tax Consultant, submit a report to the Managing Director explaining the following:

  1. Tax implications when an existing company absorbs another existing company.
    (5 Marks)
  2. Tax implications when a merger results in the cessation of business.
    (3 Marks)
  3. Tax implications when a business is sold or transferred.
    (3 Marks)
  4. The powers of the Federal Inland Revenue Service (FIRS) on issues concerning mergers and acquisitions of companies.
    (4 Marks)

Total: 15 Marks

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – Nov 2022 – L3 – Q5 – Taxation and Corporate Governance"

  • 15 Marks

AT – Nov 2017 – L3 – Q7 – Tax Implications of Mergers and Acquisitions

Advise on tax implications for Aba Foods merger/acquisition options with Ifedi Foods.

The prevailing economic condition has led to the business cessation of many SMEs. Aba Foods Limited, a well-known food and beverage company in Abia State, faced difficulties in securing long-term loans, preventing the replacement of its outdated equipment and leading to losses. To ensure continuity, the company considered mergers or acquisitions and entered discussions with Chief Egodi of Ifedi Group. Chief Egodi, concerned about the tax implications of potential arrangements, sought advice from your firm, Aliyara & Co., Chartered Accountants.

Required:
Provide a presentation in the form of advice:

(a) Explain the tax implications of Aba Foods Limited merging with Ifedi Foods and Beverage Limited, with Ifedi inheriting all assets and liabilities. (5 Marks)
(b) Explain the tax implications if Ifedi Foods and Beverage Limited is reconstituted to take over Aba Foods’ assets and liabilities. (5 Marks)
(c) Explain the tax implications if Ifedi Foods and Aba Foods enter a Joint Venture or Partnership Agreement. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – Nov 2017 – L3 – Q7 – Tax Implications of Mergers and Acquisitions"

  • 15 Marks

AT – Nov 2017 – L3 – Q5 – Tax Administration and Dispute Resolution

Outline objection and appeal procedures for FIRS additional assessment.

Papa Ejima Limited, a manufacturing company, filed tax returns for the 2014 Assessment Year. The Federal Inland Revenue Service (FIRS) issued additional assessments totaling N360,000 for Value Added Tax (VAT) and N3,050,000 for Withholding Tax (WHT). The Managing Director disputes this assessment, asserting the accuracy of the company’s tax filings.

The records of the company for the Accounting Year ended December 31, 2013 showed:

Description Amount (N)
Revenue 187,500,000
Cost of sales (102,500,000)
Gross Profit 85,000,000
Other income 31,250,000
Operating expenses (57,250,000)
Interest and similar charges (3,200,000)
Profit before tax 55,800,000
Taxation (6,250,000)
Profit after tax 49,550,000
Dividend (38,500,000)
Retained profit for the year 11,050,000

Other relevant information includes:

  1. Revenue:
    • Export sales: N58,500,000
    • Local sales: N129,000,000
  2. Cost of sales:
    • Opening inventory (VAT inclusive): N22,800,000
    • Closing stock (VAT inclusive): N37,150,000
    • Purchase of raw material: N90,600,000
    • Freight charges: N18,700,000
    • Other direct materials: N27,550,000
  3. Other income:
    • Foreign exchange gain: N4,800,000
    • Profit on sale of Non-current assets (sales proceeds is N21.5m): N8,850,000
    • Management fees from subsidiary companies: N17,600,000
  4. Operating expenses:
    • Office rent: N18,000,000
    • Audit fees: N4,000,000
    • Consultancy fees to ZXY Ltd: N11,000,000
    • Directors’ fees: N7,500,000
    • Other expenses: N16,750,000
  5. Additional details:
    • The company purchased Non-Current Assets (VAT inclusive): N84,000,000
    • VAT remitted to FIRS during the year: N1,976,235
    • WHT remitted to FIRS during the year: N6,650,000

Required:
As the tax consultant for the company, prepare a memo to advise the Managing Director on the appropriate objection and appeal procedures available to the company under the tax regulations.

(Total 15 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – Nov 2017 – L3 – Q5 – Tax Administration and Dispute Resolution"

  • 30 Marks

TAX – May 2015 – L2 – SA – Q1 – Tax Audits and Investigations

Required to prepare tax documentation and compute liabilities for BICCI Nigeria Limited in response to FIRS tax audit report.

You have been invited to make a presentation to the Board of Directors of BICCI Nigeria Limited. Your performance at the presentation will determine your appointment as the Tax Consultant to the company.

BICCI Nigeria Limited, a trading company, was incorporated on 2 March 2009. It commenced business on 2 October of the same year, making accounts up to 30 September annually. The shareholders invested N18 million in non-current assets before the company commenced business in 2009.

Other information provided:

  1. Authorized, Issued, and Fully Paid-Up Capital – N10 million.
  2. Value Added Tax (VAT) and Withholding Tax (WHT) returns filed for 2010–2013 were carried out 2 months after each transaction month.
  3. Companies Income Tax (CIT) and Tertiary Education Tax (TET) returns were filed on 30 June for the 2011 to 2014 Assessment Years.

Extracts from the accounts (2010–2013):

On 15 July 2014, FIRS inspectors visited BICCI, informing management of an upcoming tax audit on 25 August 2014. They requested the following documents:

  1. Audited Accounts (2010–2013)
  2. Bank Statements (2010–2013)
  3. Trial Balance for each year
  4. Evidence of Tax Returns filed (CIT, VAT, WHT, TET)
  5. General Ledger printouts
  6. Proof of tax payments
  7. Tax registration evidence
  8. Tax Clearance Certificates
  9. WHT Credit Notes, if any

FIRS Interim Tax Audit Report (summarized):

Item 2013 2012 2011 2010
Revenue (N’000) 25,320 21,522 13,989 7,694
VAT on Revenue 8,862 7,533 4,896 3,462
Undisclosed Revenue 16,458 13,989 9,093 4,232
Directors’ Current Account 19,578 21,228 19,250 18,000
Payments under WHT:
– Directors’ Fees 1,625 2,125 1,145 960
– Rent 3,500 3,500 2,625 2,625
– Professional Fees 1,200 1,200 950 950
– Commission 2,825 1,875 970 376

Additional Adjustments:

  1. Cost of Sales written back: 60%
  2. Selling & Distribution expenses written back: 60%
  3. Admin expenses written back: 60%

Requirements:

a. List the documents required by FIRS for the Interim Tax Audit. (3 Marks)
b. Calculate BICCI Nigeria Limited’s potential tax liabilities per the Interim Tax Audit. (12 Marks)
c. Prepare a schedule for VAT and WHT receipts collected by BICCI. (7 Marks)
d. Advise management on possible tax consequences if they do not respond to the audit. (8 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2015 – L2 – SA – Q1 – Tax Audits and Investigations"

  • 15 Marks

TAX – May 2024 – L2 – SA – Q5 – Value Added Tax (VAT)

Compute VAT payable by Havillah Manufacturing Limited and identify VAT-exempt goods and services.

Havillah Manufacturing Limited, engaged in manufacturing perfumes and other cosmetic products, has the following profit or loss statement for the year ended September 30, 2021:

Additional Information:

  1. Turnover includes N64,350,000 from export sales and N141,900,000 from local sales.
  2. Cost of Sales includes:
    • Opening inventory (VAT inclusive): N24,915,000
    • Closing inventory (VAT inclusive): N40,865,000
    • Purchase of raw materials: N94,600,000
    • Freight charges: N20,570,000
    • Other direct materials: N13,530,000
  3. Plant and machinery purchased for N24,750,000 is included in opening inventory, VAT inclusive.
  4. VAT and withholding tax remitted during the year amounted to N2,173,180 and N1,787,500, respectively.

Required: a. Compute the net VAT payable by Havillah Manufacturing Limited for the year. (10 Marks)
b. State FIVE VAT-exempt goods. (2½ Marks)
c. State FIVE VAT-exempt services. (2½ Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2024 – L2 – SA – Q5 – Value Added Tax (VAT)"

  • 1 Marks

TAX – Nov 2020 – L1 – SA – Q11 – Value Added Tax (VAT)

Identify which information is not required on a tax invoice for goods or services.

A tax invoice issued for goods sold or services rendered must contain the following information, EXCEPT:
A. Type/nature of goods
B. Customer’s name and address
C. Rate of VAT applied
D. Bio data of taxpayer
E. Taxpayer’s identification number

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q11 – Value Added Tax (VAT)"

  • 5 Marks

TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)

Compute the total VAT payable to the Federal Inland Revenue Service (FIRS) for a series of transactions involving a textile company, wholesaler, and retailer.

Olamide Limited is a textile company based in Abuja. The company sold its vatable products to a wholesaler, Qudus Enterprises, for N1,800,000. The wholesaler in turn sold the products to a retailer, Mr. Lekan, for N2,500,000, who finally sold to consumers for N5,000,000. Assume there was no closing inventory at each stage of the transactions.

Required:
Compute the total VAT payable to the Federal Inland Revenue Service.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2016 – L2 – Q5b – Value Added Tax (VAT)"

  • 15 Marks

TAX – Nov 2021 – L2 – Q6 – Value Added Tax (VAT)

Explanation of when goods and services are deemed to be supplied in Nigeria according to section 2 of the VAT Act.

Taxable supplies of goods and services are those listed under the First Schedule of
the Value Added Tax Act Cap VI for 2004 (as amended). Essentially, these are goods
and services liable to value added tax at the prescribed rate.
Required:
Explain when goods and services shall be deemed to be supplied in Nigeria in
accordance with section 2 of VAT Act (as amended).

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2021 – L2 – Q6 – Value Added Tax (VAT)"

  • 5 Marks

TAX – Nov 2021 – L2 – Q3c – Value Added Tax (VAT)

Explanation of the merits and demerits of Value Added Tax (VAT) as a consumption tax.

Explain the merits and demerits of VAT

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2021 – L2 – Q3c – Value Added Tax (VAT)"

  • 6 Marks

TAX – Nov 2021 – L2 – Q3b – Value Added Tax (VAT)

Explanation of penalties associated with VAT non-compliance including failure to register, failure to notify of address changes, and failure to submit returns.

Explain the penalties associated with the following:

i. Failure to register for VAT return (2 Marks)
ii. Failure to notify the FIRS of change of address or cessation of trade or business (2 Marks)
iii. Failure to submit VAT returns (2 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2021 – L2 – Q3b – Value Added Tax (VAT)"

  • 9 Marks

TAX – Nov 2021 – L2 – Q3a – Value Added Tax (VAT)

Calculation of total VAT payable by Adegboyega Enterprises to the Federal Inland Revenue Service (FIRS) for product sales.

Adegboyega Enterprise is a manufacturing outfit based in Jankara, Lagos State. In 2020, the company sold its vatable product to a wholesaler, Ikeja Venture, for N3,500,000. The wholesaler sold the products to a retailer, Mrs. Adeosun, for N4,900,000, who finally sold it to consumers for N6,300,000 (VAT inclusive). Assume there was no closing inventory at each stage of the transaction.

Required:
a. Compute the total VAT payable to the Federal Inland Revenue Service by Adegboyega Enterprises on the transactions stated above.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – Nov 2021 – L2 – Q3a – Value Added Tax (VAT)"

  • 1 Marks

TAX – May 2021 – L1 – SA – Q15 – Tax Administration and Enforcement

Objective question on the type of tax imposed on non-essential goods and services.

ax imposed on goods and services that are considered to be non-essentials is:
A. Excise duty
B. Value added tax
C. Non-essential tax
D. Luxury tax
E. Essential tax

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2021 – L1 – SA – Q15 – Tax Administration and Enforcement"

  • 1 Marks

TAX – May 2021 – L1 – SA – Q11 – Tax Administration and Enforcement

Objective question about the penalty for failure to notify FIRS of change of address within a specified time frame.

In respect of VAT, a person who fails to notify the FIRS of any change of address within one month of such change is liable to pay a penalty of:
A. N25,000
B. N20,000
C. N15,000
D. N10,000
E. N5,000

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2021 – L1 – SA – Q11 – Tax Administration and Enforcement"

  • 1 Marks

TAX – May 2021 – L1 – SA – Q10 – Value Added Tax (VAT)

Multiple-choice question identifying who is not considered a vatable person under Nigerian tax law.

Which of the following is NOT a vatable person?
A. A firm
B. A limited liability company
C. A sole trader
D. An individual
E. A public educational institution

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2021 – L1 – SA – Q10 – Value Added Tax (VAT)"

  • 15 Marks

TAX – May 2019 – L2 – Q6 – Companies Income Tax (CIT)

Compute total profit and tax liabilities, describe zero-rated VAT items, and discuss penalties for non-registration for VAT.

Duru Cobbler Limited has been in the business of shoe manufacturing for many years. Information contained in the company’s statement of profit or loss for the year ended November 30, 2018, is as follows:

Details Amount (N)
Revenue 18,546,000
Other income:
– Rental income (gross) 240,000
– Profit on sale of property, plant, and equipment 120,000
– Interest on bank deposits (net) 234,000
Total Other Income 594,000
Total Revenue 19,140,000
Less:
Staff salaries and wages 6,180,300
Finance cost 1,144,000
General administration expenses 10,585,190
Impairment loss 420,000
Depreciation and amortization 1,690,000
Total Expenses 20,019,490
Loss before tax (879,490)
Income tax expense –
Deferred tax provision (64,380)
Loss after tax (943,870)

Additional notes provided by the accountant:

  1. Finance costs include bank charges and interest on overdrafts.
  2. General administration expenses include:
    • Bad debts of N655,000 from bulk sales of shoes to the managing director’s relations.
    • Value added tax of N985,000 not imposed on some invoices.
  3. Capital allowances for the relevant year amount to N1,294,000.

Required:
(a) Compute the total profit and tax liabilities payable by Duru Cobbler Limited for the relevant year of assessment. (10 Marks)
(b) Describe zero-rated goods and services under the Value Added Tax Act Cap VI LFN 2004 (as amended) and identify two transactions that may fall under this category. (3 Marks)
(c) Identify the penalties for non-registration for VAT. (2 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "TAX – May 2019 – L2 – Q6 – Companies Income Tax (CIT)"

  • 5 Marks

PT – Nov 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Determine whether a hostel facility and the supply of food and drinks are taxable.

State whether the following are taxable or not and briefly explain your answer.
i) Hostel facility offered to candidates by the Commonwealth Hall of the University of Ghana for profit.
ii) The supply of food and drinks by Papaye to the Vice President of Ghana for the celebration of his birthday.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PT – Nov 2023 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties"

  • 5 Marks

PT – Nov 2023 – L2 – Q5b – Value-Added Tax (VAT), Customs, and Excise Duties

Calculate the withholding tax payable for a contract including various levies and VAT.

The cost of iron rods supplied by Akinto Steel Works Ltd to Oputu Construction Ltd is worth GH¢300,000 (inclusive of National Health Insurance Levy, Ghana Education Trust Fund Levy, COVID-19 Health Recovery Levy, and Value Added Tax).

Required:
Determine the Withholding Tax payable in respect of the contract for supplies. (5 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PT – Nov 2023 – L2 – Q5b – Value-Added Tax (VAT), Customs, and Excise Duties"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@nbcinstitute.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope

NBC Institute

Hello! How can I help you today?
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan