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

Conditions VAT-registered manufacturing companies must meet for VAT relief on imported raw materials.

Question

According to section (38) of the Value Added Tax Act, 2013 (Act 870), the Minister may by legislative instrument make regulations to grant relief from tax on taxable imports of goods or taxable supplies of goods acquired in the country to the persons specified in the Third Schedule.

Required:
State FOUR (4) conditions that must be satisfied by VAT-registered manufacturing companies before they are granted upfront relief of VAT and levies on imported raw materials. (10 marks)

Answer

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Tags: Manufacturing, Raw Materials, Tax law, VAT Act 2013, VAT Relief
Level: Level 2

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

PT – Aug 2022 – L2 – Q1a – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the "Benchmark Value Discount" policy in Customs Administration and how its withdrawal benefits local rice producers.

Question

The Finance Minister of Ghana during the 2022 budget presentation in Parliament announced the withdrawal of the “Benchmark Value Discount” policy on some imports. The President of the Professional Local Rice Growers Association (PLRGA) is elated about the announcement and has invited you, as a student studying taxation, to explain the concept of the Benchmark Value Discount policy to him.

Required:
Explain what the “Benchmark Value Discount” policy in Custom Administration is and how its withdrawal will be of much benefit to the President of the PLRGA.

Answer

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Tags: Benchmark Value Discount, Customs Administration, Import Duties, Local Production
Level: Level 2

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

PT – Nov 2021 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what constitutes exempt supplies under the VAT Act.

Question

What constitutes exempt supplies?

Answer

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Tags: Exempt supplies, Ghana Revenue Authority, Supply of Goods, VAT, VAT Exemptions
Level: Level 2

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

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

Explain under what condition goods applied for own consumption are treated as supply of goods.

Question

Under what condition are goods applied for own consumption treated as supply of goods?

Answer

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Tags: Ghana Revenue Authority, Own Consumption, Supply of Goods, VAT, VAT Compliance
Level: Level 2

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

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

Explain the circumstances under which a taxable supply requires an adjustment in taxable value.

Question

There are circumstances where a taxable supply by a taxable person will require adjustment so that the trader pays the required taxes to the Ghana Revenue Authority.

Required:
Explain THREE (3) of such circumstances.

Answer

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Tags: Ghana Revenue Authority, Taxable Supply, Taxable Value, VAT Adjustments, VAT Compliance
Level: Level 2

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

PT – Nov 2020 – L2 – Q2d – Value-Added Tax (VAT), Customs, and Excise Duties

Identify the taxable person when goods are sold by an agent or auctioneer.

Question

An agent sold goods on behalf of a Principal. Who is the taxable person here? If the agent was rather an auctioneer, who would have been the taxable person? (3 marks)

Answer

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Tags: Agent, Auctioneer, Taxable Person, VAT
Level: Level 2

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

PT – Nov 2020 – L2 – Q2c – Value-Added Tax (VAT), Customs, and Excise Duties

Explain VAT implications when a deposit is paid and the agreement is canceled.

Question

Rejoice Baah, a VAT registered trader, reserved goods for Agya Atta costing GH¢12,000. Agya Atta paid a deposit of GH¢2,000 with the agreement that the goods be made available to him after the remaining GH¢10,000 is paid. By mutual consent, the agreement was canceled before Agya Atta could pay the remaining amount.

Required:
What are the VAT implications of the above transactions? (3 marks)

Answer

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Tags: Cancellation, Deposit Payments, Supply of Goods, VAT
Level: Level 2

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

PT – Nov 2020 – L2 – Q2b – Value-Added Tax (VAT), Customs, and Excise Duties

Explain the VAT implications of repossession of goods under a credit agreement.

Question

Serwaa Akoto, a VAT registered trader, sold goods to Kofi Asirifi under a credit agreement. Kofi Asirifi could not pay, and Serwaa Akoto repossessed the goods.

Required:
What are the VAT implications? (3 marks)

Answer

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Tags: Credit Agreement, Repossession, Supply of Goods, VAT
Level: Level 2

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

PT – Nov 2020 – L2 – Q2a – Value-Added Tax (VAT), Customs, and Excise Duties

Define taxable activity under VAT and list examples of taxable activities.

Question

i) What is Taxable Activity under Value Added Tax? (1 mark)

ii) Identify FIVE (5) examples of taxable activities. (5 marks)

Answer

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Tags: Ghanaian Tax System, Services, Supply of Goods, Taxable Activities, VAT
Level: Level 2

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

PT – Mar 2024 – L2 – Q5a – Value-Added Tax (VAT), Customs, and Excise Duties

Explain what is meant by Goods, Works, and Services according to the Income Tax Act.

Question

Persons making payments for the supply of goods, works, and services are required by the provision of the Income Tax Act, 2015 (Act 896) to withhold taxes on the gross amount at various rates and pay the same to the Commissioner-General.

Required:
In reference to the above statement, explain what Goods, Works, and Services are.

Answer

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Tags: Goods, Income Tax Act, Services, VAT, Works
Level: Level 2