Topic: Income Tax Liabilities

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PT – April 2022 – L2 – Q3a – Income Tax Liabilities

Explain the tax treatment for overtime allowance and bonus payments in Ghana.

Question

a) Explain the tax treatment for Overtime Allowance Payment and Bonus Payment.
(6 marks)

Answer

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Tags: Bonus payment, Employee Benefits, Income Tax, Overtime payment, Taxation

Topic: Income Tax Liabilities
Series: APR 2022

PT – April 2022 – L2 – Q3b(i & ii) – Income Tax Liabilities

Compute the tax liability on overtime allowances for Maame Agyeiwaa for January and February 2021.

Question

b) Maame Agyeiwaa is a junior staff member of KayDee Ltd. Her monthly basic salary is GH¢800. She was paid an overtime allowance totalling GH¢100 during the month of January 2021. In February 2021, Maame Agyeiwaa was paid overtime allowance totalling GH¢500.

Required:
i) Compute her tax liability on the overtime allowance for the month of January 2021.
(2 marks)

ii) Compute her tax liability on the overtime allowance payments for the month of February 2021.
(3 marks)

Answer

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Tags: Employment Income, Income Tax, Overtime payment, Tax computation

Topic: Income Tax Liabilities, Taxation of Overtime
Series: APR 2022

PT – April 2022 – L2 – Q3c – Income Tax Liabilities

Determine the tax implication of overtime allowance paid to Bawa in February 2021.

Question

c) Bawa is a junior staff member of Blinks Ltd. Her monthly basic salary is GH¢2,000. She was paid an overtime allowance totalling GH¢500 during the month of February 2021.

Required:
What is the tax implication of the overtime allowance paid?
(3 marks)

Answer

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Tags: Employee Benefits, Income Tax, Overtime payment, Taxation of income

Topic: Employment Income, Income Tax Liabilities, Taxation of Overtime
Series: APR 2022

PT – April 2022 – L2 – Q3e – Income Tax Liabilities

Calculate the tax liability on Bisa's bonus income for 2021

Question

Bisa works with Kaydei Ltd and earns an annual basic salary of GH¢140,000. He was paid a bonus of GH¢45,000 in 2021.

Required:
Determine the tax liability on the bonus.
(3 marks)

Answer

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Tags: Bonus payment, Employment Income, Individual Taxation, Tax Calculation

Topic: Income Tax Liabilities, Tax Administration
Series: APR 2022

PT – April 2022 – L2 – Q5c – Income Tax Liabilities

Explain how gifts received by individuals in relation to employment, business, or investment are taxed.

Question

Gift means a receipt without consideration or for inadequate consideration.

Answer

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Tags: Business income, Employment Income, Income Tax, Taxation of Gifts

Topic: Income Tax Liabilities, Taxation of Gifts
Series: APR 2022

PT – April 2022 – L2 – Q2d – Pension Entitlement Calculation

Compute the monthly pension entitlement of Mrs. Akoto based on her salary and months of contribution.

Question

d) Mrs. Akoto has been engaged by Madane Ltd as the Marketing Manager for 30 years on an annual salary of GH¢20,000.
The following information relates to Mrs. Akoto:
i) Throughout her working life, she earned her best salaries from Madane Ltd.
ii) She has 408 months’ contribution to her credit.
iii) She retired on 31 March 2020 at the age of 60.

Required:
Compute her monthly pension entitlement.
(5 marks)

Answer

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Tags: Pension calculation, Pension entitlement, Pension Right, Retirement

Topic: Income Tax Liabilities, Pension Calculation
Series: APR 2022

PT – Nov 2023 – L2 – Q1b – Income Tax Liabilities

Compute tax payable for resident and non-resident individuals for the 2022 year of assessment.

Question

The information below relates to individuals who earned income in the 2022 year of assessment:
Resident individuals:
Mr. Agandi and Mr. Yonny are resident employees in Ghana. The chargeable income earned per annum by Mr. Agandi and Mr. Yonny amounts to GH¢300,000 and GH¢650,000 respectively.

Non-Resident individuals:
Mrs. Zindana and Mrs. Maleda are non-resident individuals. Mrs. Zindana and Mrs. Maleda have earned chargeable incomes to the tune of GH¢300,000 and GH¢650,000 per annum respectively.

Required:
Compute their respective taxes payable for the 2022 year of assessment.

Answer

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Tags: Income Tax, Non-Resident Individuals, Resident Individuals, Tax computation
Level: Level 2

Topic: Income Tax Liabilities
Series: NOV 2023

PT – Nov2019 – L2 – Q3d – Tax Administration

This question asks to identify the key features of the Vehicle Income Tax Stickers (VITS) tax system.

Question

In 2003, the Vehicle Income Tax Stickers (VITS) was introduced by way of LI 1727 and amended by Income Tax Regulations, 2016 (LI 2244).

Required:
Identify the key features of the VITS tax system.
(6 marks)

Answer

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Tags: Income Tax Regulations, Vehicle Income Tax, VITS
Level: Level 2

Topic: Income Tax Liabilities
Series: NOV 2019

PT – Nov2019 – L2 – Q3c – Income Tax Liabilities

This question focuses on determining the chargeable income and tax liability of an expatriate working in Ghana.

Question

Lord Pakro was seconded to Ghana from the Crops Scientists Institute in USA as a Crop Scientist to Crop Research Institute in Ghana, for a period of 5 months, starting from 1 August, 2018. He was based at Nyankpala (Northern part of Ghana), one of the farming sites of the Crop Research Institute.

His conditions of service were as follows:
GH¢

Salary: 6,000 per month
Expatriate allowance: 2,000 per month
Risk allowance: 1,000 per month
He was provided with a furnished bungalow and a Toyota Pick-up vehicle with driver and fuel for both official and private activities.

In addition to the above, the parent company agreed to meet his commitment at home during his six-month stay in Ghana at $1,200 per month. The average exchange rate has been $1=GH¢5.00.

Required:
Determine Lord Pakro’s chargeable income and tax liability, if any, during his stay in the country. Produce the related notes guiding your determination.
(6 marks)

Answer

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Tags: chargeable income, Expatriates, Income Tax Computation, Non-Residents
Level: Level 2

Topic: Income Tax Liabilities

PT – Nov 2019 – L2 – Q3b – Income Tax Liabilities

This question asks to calculate the tax implications of overtime payments for a senior staff member.

Question

Amos is a Senior Staff member of Sims Company Limited. His monthly basic salary is GH¢1,490.00. He was paid an overtime totalling GH¢650.00 during the month of January, 2019.

Required:
What is the tax implication? (3 marks)

Answer

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Tags: Income Tax, Overtime, Tax computation
Level: Level 2

Topic: Income Tax Liabilities
Series: NOV 2019

PT – April 2022 – L2 – Q3a – Income Tax Liabilities

Explain the tax treatment for overtime allowance and bonus payments in Ghana.

Question

a) Explain the tax treatment for Overtime Allowance Payment and Bonus Payment.
(6 marks)

Answer

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Tags: Bonus payment, Employee Benefits, Income Tax, Overtime payment, Taxation

Topic: Income Tax Liabilities
Series: APR 2022

PT – April 2022 – L2 – Q3b(i & ii) – Income Tax Liabilities

Compute the tax liability on overtime allowances for Maame Agyeiwaa for January and February 2021.

Question

Required:
i) Compute her tax liability on the overtime allowance for the month of January 2021.
(2 marks)

ii) Compute her tax liability on the overtime allowance payments for the month of February 2021.
(3 marks)

Answer

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Tags: Employment Income, Income Tax, Overtime payment, Tax computation

Topic: Income Tax Liabilities, Taxation of Overtime
Series: APR 2022

PT – April 2022 – L2 – Q3c – Income Tax Liabilities

Determine the tax implication of overtime allowance paid to Bawa in February 2021.

Question

c) Bawa is a junior staff member of Blinks Ltd. Her monthly basic salary is GH¢2,000. She was paid an overtime allowance totalling GH¢500 during the month of February 2021.

Required:
What is the tax implication of the overtime allowance paid?
(3 marks)

Answer

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Tags: Employee Benefits, Income Tax, Overtime payment, Taxation of income

Topic: Employment Income, Income Tax Liabilities, Taxation of Overtime
Series: APR 2022

PT – April 2022 – L2 – Q3e – Income Tax Liabilities

Calculate the tax liability on Bisa's bonus income for 2021

Question

Bisa works with Kaydei Ltd and earns an annual basic salary of GH¢140,000. He was paid a bonus of GH¢45,000 in 2021.

Required:
Determine the tax liability on the bonus.
(3 marks)

Answer

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Tags: Bonus payment, Employment Income, Individual Taxation, Tax Calculation

Topic: Income Tax Liabilities, Tax Administration
Series: APR 2022

PT – April 2022 – L2 – Q5c – Income Tax Liabilities

Explain how gifts received by individuals in relation to employment, business, or investment are taxed.

Question

Gift means a receipt without consideration or for inadequate consideration.

Answer

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Tags: Business income, Employment Income, Income Tax, Taxation of Gifts

Topic: Income Tax Liabilities, Taxation of Gifts
Series: APR 2022

PT – April 2022 – L2 – Q2d – Pension Entitlement Calculation

Compute the monthly pension entitlement of Mrs. Akoto based on her salary and months of contribution.

Question

Required:
Compute her monthly pension entitlement.
(5 marks)

Answer

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Tags: Pension calculation, Pension entitlement, Pension Right, Retirement

Topic: Income Tax Liabilities, Pension Calculation
Series: APR 2022

PT – Nov 2023 – L2 – Q1b – Income Tax Liabilities

Compute tax payable for resident and non-resident individuals for the 2022 year of assessment.

Question

Required:
Compute their respective taxes payable for the 2022 year of assessment.

Answer

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Tags: Income Tax, Non-Resident Individuals, Resident Individuals, Tax computation
Level: Level 2

Topic: Income Tax Liabilities
Series: NOV 2023

PT – Nov2019 – L2 – Q3d – Tax Administration

This question asks to identify the key features of the Vehicle Income Tax Stickers (VITS) tax system.

Question

In 2003, the Vehicle Income Tax Stickers (VITS) was introduced by way of LI 1727 and amended by Income Tax Regulations, 2016 (LI 2244).

Required:
Identify the key features of the VITS tax system.
(6 marks)

Answer

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Tags: Income Tax Regulations, Vehicle Income Tax, VITS
Level: Level 2

Topic: Income Tax Liabilities
Series: NOV 2019

PT – Nov2019 – L2 – Q3c – Income Tax Liabilities

This question focuses on determining the chargeable income and tax liability of an expatriate working in Ghana.

Question

His conditions of service were as follows:
GH¢

In addition to the above, the parent company agreed to meet his commitment at home during his six-month stay in Ghana at $1,200 per month. The average exchange rate has been $1=GH¢5.00.

Required:
Determine Lord Pakro’s chargeable income and tax liability, if any, during his stay in the country. Produce the related notes guiding your determination.
(6 marks)

Answer

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Tags: chargeable income, Expatriates, Income Tax Computation, Non-Residents
Level: Level 2

Topic: Income Tax Liabilities

PT – Nov 2019 – L2 – Q3b – Income Tax Liabilities

This question asks to calculate the tax implications of overtime payments for a senior staff member.

Question

Amos is a Senior Staff member of Sims Company Limited. His monthly basic salary is GH¢1,490.00. He was paid an overtime totalling GH¢650.00 during the month of January, 2019.

Required:
What is the tax implication? (3 marks)

Answer

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Tags: Income Tax, Overtime, Tax computation
Level: Level 2