2. Mr Derrick Asumadu Danso has been in employment at KNUST IDL ACF Limited since 1st April 2014 as Financial Controller on a salary scale of GH 12,000 GH 6,000.00 GH 60,000.
His service conditions include the following:
i) Provision of a well-furnished bungalow in respect of which he pays GH100 per month as rent by way of deduction at source.
ii) Provision of a Land Cruiser Prado Vehicle with driver and fuel for both official and private purposes
iii) Special retirement package by way of a provident fund of which he contributes 7% of his basic salary, while the company tops it up with 8.5%.
iiii) Social Security & National Insurance Trust contribution of 7%
His Returns submitted to Ghana Revenue Authority (GRA) on 16th March, 2018 in respect of 2017 Year of Assessment show the following unconsolidated allowances and benefits:
v) Responsibility allowance of GH800 per month for which the company pays him cash.
vi) Utilities allowance per annum, GH2,400
vii) Risk allowance of 15% on basic salary and car maintenance allowance of GH1,200 for the year.
viii) Leave allowance of GH1,800 per annum.
ix) Watchman and a garden boy on salary of GH300 and GH350 per month respectively.
x) Medical allowance per year GH2,400.
xi) Meals allowance of GH550 per month.
xii) Two house helps on GH380 wages per month. The amount is paid to Mr. Danso in cash directly by the company.
xiii) Bonus of 40% of annual basic salary.
xiiii) Monthly Overtime allowance of GH140
xv) Unaccountable Entertainment allowance of GH800 a year.
Additional Information
xvi) On 1st January, 2017 he was given a car loan of GH10,000 to purchase a car for his wife at a simple interest rate of 15.0% per annum. The institution gives similar facility to any other customer at the rate of 28% but the statutory rate (Bank of Ghana Rate) is 25.0%. The loan is to be paid within the period of 24 months.
xvii) He is married with five (5) children, three (3) of whom are in SHS, the rest are working.
xviii) He is also responsible for the upkeep of four (4) aged relatives of his.
xix) He is currently pursuing a Master of Science degree in Accounting at KNUST where he incurred GH 13,000 by way of educational expenses in 2017
xx) He withdrew GH 10,500 from his provident fund to buy a house in Kumasi in 2017
xxi) His December, 2017 salary was paid on 2nd January 2018. However all allowances which are unconsolidated were paid in full during 2017 except those tied to the basic salary.
Required
a) Calculate his chargeable income for the 2017 Year of Assessment
b) Compute his tax liability for 2017 Year of Assessment
3. Summarize the tax implications of the 2018 Mid-Year Budget and that of the 2019 Budget and critically them separately.
