Topic: Value-Added Tax (VAT), Customs, and Excise Duties

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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.

Question

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.

Answer

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Tags: Direct Tax, Medical Supplies, Tax Agent, Tax Compliance, Tax computation, Tax deduction, VAT, VAT Withholding, Withholding Tax
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties, Withholding Tax Administration
Series: Nov 2024

PT – Nov 2024 – L2 – Q2d – Withholding VAT Computation

Compute GETFund Levy, NHIL, COVID-19 Levy, output VAT, withholding VAT, and tax payable for a firm under the VAT scheme

Question

N&L Associates, an accounting firm, issued an invoice to a withholding VAT agent for GH¢250,000 (including VAT, GETFund Levy, NHIL, and COVID-19 Levy) for assurance services provided to a client in March 2024. These were the only services provided by the firm during the period, and payments are to be made within the same period.

Required:

i) Calculate the portion of the GETFund Levy, NHIL, and COVID-19 Levy that the agent must compute for the payment of the services rendered. (3 marks)
ii) Determine the output VAT to be reported on the accounting firm’s monthly VAT return.
iii) Compute the withholding VAT to be withheld if N&L Associates are VAT withholding agents.
iv) Calculate the tax payable by the accounting firm if the total input tax for the period amounts to GH¢7,200.

Answer

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Tags: Accounting Firms, Covid-19 Levy, GETFund Levy, NHIL, Output VAT, Tax computation, Tax Liability, Withholding VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: Nov 2024

TAX – Nov 2018 – L1 – SA – Q12 – Value Added Tax (VAT)

Calculate the output VAT for a vatable product sold to a final consumer.

Question

In 2018, a vatable product was sold to a final consumer for N210,000 (VAT inclusive). The output VAT was:
A. N10,500
B. N10,000
C. N7,500
D. N5,000
E. N2,500

Answer

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Tags: Nigerian Tax System, Output VAT, VAT Calculation, Vatable Product
Level: Level 1

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2020

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

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

Question

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

Answer

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Tags: Invoice Requirements, Nigerian Tax System, Tax Invoice, VAT
Level: Level 1

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2020

PT – Nov 2023 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

State five circumstances under which the Commissioner-General shall cancel VAT registration.

Question

State FIVE (5) circumstances under which the Commissioner-General shall cancel the VAT registration of a taxable person.

Answer

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Tags: Cancellation, Commissioner-General, VAT Registration
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2023

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.

Question

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.

Answer

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Tags: Food Supply, Hostel Facility, Taxable Transactions, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2023

PT – Nov 2023 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Define "Supply of Goods" and "Supply of Services" as per the VAT Act.

Question

There is imposed by the Value Added Tax Act, 2013 (Act 870) a tax to be known as the value added tax, which is to be charged on:
(a) The supply of goods or services made in the country other than exempt goods or services; and
(b) The import of goods or services other than exempt import.

Required:
i) What constitutes “Supply of Goods”?
ii) What constitutes “Supply of Services”?

Answer

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Tags: Supply of Goods, Supply of Services, Taxation, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: NOV 2023

PT – May 2020 – L2 – Q2d – Value-Added Tax (VAT)

Discusses the conditions under which a small business can apply for VAT registration without meeting the threshold requirements.

Question

Abah Enterprise is a small business but intends to bid for government contracts. It has a very small cash flow, with turnover unable to be registered under the compulsory registration arrangement for Value Added Tax. The proprietor of Abah Enterprise feels that if the enterprise is not registered for Value Added Tax, it will be difficult to be able to bid for government contracts.

Required:
Under what condition can Abah Enterprise apply to Ghana Revenue Authority for Value Added Tax Registration without meeting the threshold registration requirements under section 6 of the Value Added Tax Act 2013 (Act 870)?
(5 marks)

Answer

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Tags: Small Business, Tax Administration, Threshold, VAT Registration
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAY 2020

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

Advise on deductibility rules of input VAT incurred before registration.

Question

Atakora Manufacturing Ltd is a company at Winneba that manufactures roofing sheets. The company has recently registered for VAT and is not sure about the treatment of its input VAT paid prior to VAT registration. The company has sought your guidance on how to treat input taxes paid prior to registration.

Required:

Advise the company on the deductibility rules of input VAT incurred by a company prior to VAT registration.

Answer

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Tags: Input VAT, Tax law, VAT Deductibility, VAT Registration
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAR 2023

PT – March 2023 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

State the conditions under which voluntary VAT registration may be denied.

Question

An application for a voluntary VAT registration may be denied the opportunity to register for VAT although the Value Added Tax Act, 2013 (Act 870) makes provision for voluntary VAT registration.

Required:

State the conditions under which an application for voluntary VAT registration may be denied.

Answer

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Tags: Conditions for Denial, Tax law, VAT Registration, Voluntary VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAR 2023

PT – March 2023 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the exceptions to the turnover rules under section 11 of the VAT Act.

Question

Despite the turnover rules stated under section 6 of the Value Added Tax Act, 2013 (Act 870), there are certain exceptions to the turnover rules under section 11 of the same Act.

Required:

Explain the exceptions to the turnover rules under section 11 of the Value Added Tax Act 2013 (Act 870).

Answer

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Tags: Registration Exceptions, Tax law, Turnover Rules, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAR 2023

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

Breakdown of VAT and other taxes included in a phone bill using a given total amount.

Question

Kingsly Atakora is a postpaid customer of MTN Ghana Ltd. He received his July 2022 billing from MTN Ghana Ltd amounting to GH¢3,121 inclusive of all taxes and levies. He is worried about the amount charged for his telephone usage for the month and wants to know the tax composition in the charge.

Required:
Compute the amounts of the following taxes included in the bill for July 2022:
i) VAT
ii) National Health Insurance Levy (NHIL)
iii) Ghana Education Trust Fund Levy (GETL)
iv) Covid-19 Levy
v) Communication Service Tax (CST)

Answer

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Tags: Covid-19 Levy, CST, GETFund Levy, NHIL, Tax computation, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: JULY 2023

PT – July 2023 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explanation of three situations where a taxpayer cannot claim an input tax under VAT rules.

Question

State THREE (3) situations under which a taxpayer cannot claim an input tax. (3 marks)

Answer

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Tags: Input Tax, Tax Administration, Tax deductions, VAT, VAT Claim
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: JULY 2023

PT – July 2023 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Explanation of five circumstances under which the Commissioner-General may cancel a VAT registration.

Question

State FIVE (5) circumstances under which the Commissioner-General may cancel a VAT registration of a taxable person. (5 marks)

Answer

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Tags: Commissioner-General, Tax Administration, VAT, VAT Cancellation, VAT Registration
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: JULY 2023

PT – May 2021 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the VAT implications on the sale of assets by a receiver.

Question

A receiver of XX Bank intends to sell assets of the bank. The receiver wants your guidance on the VAT implications on the sale of the bank’s assets.

Required:
What is the VAT implication on the sale of the bank’s assets?

Answer

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Tags: Asset sale, Receivership, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAY 2021

PT – May 2021 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Discuss the VAT arrangement between Kuundive Ltd and Yelawana Ltd regarding the distribution and commission.

Question

Kuundive Ltd produces fruits that have caught the interest of children. Kuundive Ltd engages Yelawana Ltd to mainly distribute its product and, in turn, receives a commission. Per the arrangement, Yelawana will put a margin on the price for the distribution.

Required:
What is the VAT arrangement between Kuundive Ltd and Yelawana?

Answer

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Tags: Commission, Principal-Agent Relationship, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAY 2021

PT – May 2021 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Explain how VAT will be accounted for in the case of imported services in Ghana.

Question

MMX Bank, a resident financial institution in Ghana, contracted Crown UK, a specialist in software maintenance. Per the contract, Crown UK is required to come to Ghana to provide the services every two years. The specialist will provide services to the bank’s clients in the normal banking operation.

Required:
How will VAT, if any, be accounted for?

Answer

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Tags: Imported Services, Reverse Charge, VAT
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: MAY 2021

PT – Aug 2022 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

List three conditions under which a taxable person can deduct input tax without an invoice.

Question

Where a taxable person does not have a tax invoice that provides evidence of the input tax paid, the Commissioner-General may allow a deductible input tax in the tax period in which the deduction arises to a taxable person under certain conditions.
Required:
State THREE (3) conditions that must be satisfied before a taxable person without a tax invoice may be allowed an input tax deduction. (6 marks)

Answer

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Tags: Commissioner-General, Tax deduction, Tax Invoice, VAT Input Tax
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: AUG 2022

PT – Aug 2022 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Advise Ekumfi Fruit Processing on the conditions required for a VAT refund under the Value Added Tax Act, 2013.

Question

You are a student of taxation at Ebeyeyie Tax Education Institute. You have been contacted for tax advice by Ekumfi Fruit Processing Ghana Ltd. The company produces various kinds of fruit juices for both local and foreign markets. The Finance Director recently learned that the company can apply for VAT refund from the Ghana Revenue Authority (GRA) and has approached you for advice.
Required:
Advise the company on SIX (6) conditions that must be satisfied before the GRA may refund the excess VAT Input Tax to the company under the Value Added Tax Act, 2013 (Act 870), as amended. (9 marks)

Answer

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Tags: GRA, Input VAT, Tax Administration, Tax Refund Conditions, VAT Refund
Level: Level 2

Topic: Value-Added Tax (VAT), Customs, and Excise Duties
Series: AUG 2022

PT – Dec 2023 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explanation of activities that do not constitute supply of goods or services under the VAT Act 2013.

Question

Section (33) of the Value Added Tax Act, 2013 (Act 870) states that; “Except as otherwise provided in this Act or Regulations, a taxable supply is a supply of goods or services made by a taxable person for consideration, other than an exempt supply, in the course of, or as part of taxable activity carried on by that taxable person”.

Required:
State THREE (3) activities that do not constitute supply of goods or services under the Value Added Tax Act, 2013 (Act 870). (5 marks)

Answer

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Tags: Non-Supply of Goods, Non-Supply of Services, Tax law, VAT Act 2013
Level: Level 2