QUESTION 1 (a) (b) State any five (5) offences which are punishable under the Internal Revenue

Act, 2000 (Act 592). (5 marks) Kae Me Bre Ltd, a self assessed company established under the Large Tax Payer Unit, estimated its chargeable income for the Assessment Year 2007 as GH70,000 (tax GH 17,500). Submission of annual return at the end of the assessment year showed actual chargeable income of GH105,000 (tax GH26,250).

You are required to: (i) (ii) (c) Determine whether penalty should be imposed for under estimating its projected income and tax payable under section 144 of the Internal Revenue Act, 2000 Act 592. Compute any applicable penalty. List any five (5) withholding taxes which are deemed to be final tax. (5 marks) (Total: 20 marks) (10 marks)

QUESTION 2 (a) (i) List the two (2) main types of methods used in computing excise duties. (4 marks) (ii) (b) Demonstrate with your own example how they are applied in arriving at the excise duty payable. (6 marks)

Explain briefly the following: (i) (ii) Zero rated supply Exempt supply (4 marks)

(c)

You are required to contrast the VAT treatment of traders making (i) (ii) only zero rated supplies only exempt supplies (6 marks) Total: 20 marks

QUESTION 3 Sugar Box Ltd is a limited liability company which deals in the manufacture of plastic waste in Accra. It commenced business on 1st March 2001 and maintained accounts to 31st December every year. Its trading profit/ (loss) as adjusted for taxation were: Period to 31/12/01 Year ended 31/12/02 Year ended 31/12/03 The company acquired the following assets: Date of Acquisition 1/3/01 1/6/01 Asset Computers Motor vehicles (Opel Astra) (Toyota Avensis Salon) Plant & Machinery Furniture & Fittings Additional computers for the accounts office Delivery van Machinery Motor vehicle Mercedez Benz Salon Cost () 55,000,000 75,000,000 340,000,000 190,000,000 86,000,000 65,500,000 170,000,000 420,000,000 510,500,000 (850,000,000) 1,350,000,000 2,560,000,000

18/7/01 21/12/01 20/2/02 11/5/02 14/4/03 10/11/03

NOTE: The Opel Astra purchased on 1/6/01 was sold for 30,000,000 on 16/09/03 and some of the companys furniture were disposed off at 2,400,000 on 30/9/03. You are required to determine the net tax payable for the assessment years 2001, 2002 and 2003. Use the following rates of capital allowance. Class 1 Class 2 Class 4 Class 5 Class 6 40% 30% 20% 10% 10% 24 marks 2

Rate of tax for all the assessment years was 32.5%.

QUESTION 4 The information below relates to the contents of 2007 annual (tax) returns filed by Mr. Kassim Moro, an engineering consultant who was formerly a resident in Australia but currently settled in Ghana. He is married and has four children who are in registered government educational institutions in Accra. He remits GH50 per month to his aged parents (Father and Mother) who are staying in the village. Income earned in Ghana: Business Income Directors Fees (Gross) Bank Interest GH 15,000 1,500 2,500

Kassim Moro bought some shares in a mining company in Australia when he worked there for some years. During the year under review he received dividends amounting to GH5,100 from Australia. Tax deducted from the dividend was GH900. There is an existing Double Taxation Agreement between Ghana and Australia. You are required to determine the Tax Credit Relief to be granted to Mr. Kassim Moro and his net tax payable in Ghana. Tax Rate for 2007 First Next Next Next Exceeding GH 240 240 1,200 7,920 9,600 Free 5% 10% 17.5% 25% 15 marks

QUESTION 5 (a) The amount of a capital gain accruing to or derived by a person from the realization of a chargeable asset owned by that person is the excess of the consideration received by that person from the realization over the COST BASE at the time of realization. 3

Briefly explain what constitutes the cost base of a chargeable asset. (10 marks) (c) John Twum bought a building at Tema Community 10 for GH20,000 in 2006, and sold it for GH65,000 in 2008. Legal expenses on the sale were GH2,500 and the estate agents fee was GH2,000. Calculate the capital gains tax payable on this transaction. (5 marks) (c) Who are exempted from payment of gift tax on taxable gifts? (6 marks) Total: 21 marks