COURSE : TAXATION

EMPLOYMENT INCOME QUESTIONS

1 KOFI NKRABEA has been appointed the Administrative Manager of Cool Running Limited. His appointment took effect from 1st June 2012 on a consolidated salary of GH 18,250.00 X GH 250.00 - GH 18,750.00. KOFI NKRABEA also enjoys the following allowances and benefits: GH Responsibility allowance 450.00 per month Child education allowance 300.00 per month General service allowance 450.00 per annum KOFI NKRABEA is provided with soft furnished accommodation by his employer as well as an Benz saloon car, which is fueled by the company. He contributes 5.5% of his salary to the Social Security Fund. KOFI NKRABEA received dividend of GH 12,000.00 (net) from ASEMPA Limited, a company in which he holds 50,000 shares. Required: Compute KOFI NKRABEA tax liability for the 2016 year of assessment to the nearest Ghana cedi.

QUESTION TWO

Mr. Yentumi is in the employment of Jobel & Associates as a senior partner. His appointment took effect from on 1 April, 2010 on a salary scale of GH18,600 x GH600 - GH22,800. He also enjoys the following:

i. Allowances: Responsibility, GH150 per month Inducement, 25% of basic salary Child education, GH350 per month General services, GH300 per month

ii. Other benefits: A soft furnished accommodation A saloon car, driver and fuel Mr. Yentumi, who is a student of ICAG and CIMA Ghana, is married and has four children all of whom are in recognized first and second cycle educational institutions in Ghana. He lives with his aged mother and father. He contributes 5.5% of his salary to the Social Security Fund. You are required to: Compute Mr. Yentumis chargeable income and tax liability for the 2017 Year of Assessment.

QUESTION THREE

Mr. Asempa is employed as an Financial Accountant with Tema Brewery Ltd on a basic salary of GH 8,500.00 per month. He is also entitled to a professional allowance of GH 600.00 per month. Mr Asempa is provided with furnished accommodation by his employers and fuel for his own vehicle. She contributes to the Social Security Fund. Required:

a) Determine Mr. Asempas chargeable income for the month.

b) What is his tax liability?

QUESTION FOUR

Mrs. Quansah retired prematurely from the Ministry of Finance & Economic Planning and joined Jobel & Associates as an Associate Consultant with effect from 1st September, 2012. She was placed on a salary scale of GH 210,600, X 9,820 - GH 249,880 per annum plus the following allowance: a. Professional Risk Allowance GH 1,200 per month b. Responsibility Allowance GH 1,100 per month c. Inconvenience Allowance GH 500 per month She was provided with fully-furnished accommodation and night watchman, pick-up with a driver and fuel and a labourer to keep her residence always tidy. They were all paid GH 700 a month each directly on the payroll by the firm. The other details are as follows: Quansahs children were also attending Amoh International School with fees of GH 3,500 per annum. She also took care of her aged mother and another old dependent at her church. Although she is already Chartered Accountant, she also undertaking a self-financed professional course in Management Consultancy. Required:

a) Compute Mrs. Quansahs chargeable income for the year of assessment 2014 (8 Marks)

b) Determine her Tax liability and Net/ Disposable (take home/ pocket) Income. (2 Marks)

c) Is Mrs. Quansah under a contract of or for employment? State any three (3) reasons for your answer.