Edwin was appointed managing director of Fashion Solutions ltd on a basic salary of GH 20,000 a year with effect from 1^st January 2012.

The contract provided for an annual increase of 20% each year.

In addition, he was entitled to the following allowances:

GH

a) Medical allowance 4,000

b) Entertainment allowance 2,000

c) Responsibility allowance 3,000

d) Bonus 30% of basic salary

The company provided him with a soft furnished accommodation for which GH 350 is deducted from source every month. He is also provided with a car with free supply of fuel for official use.

Edwin contributes 5.5% to the social security scheme and the employer also contributes 13.5% of his basic pay.

Edwin lives with two (2) wives, and four children who are in approved basic schools in Germany.

He has two Life Insurance Policies with the following details:

Company Maturity Annual Premium

GH GH

Nsem Assurance (1) 80,000 2,450

Kowtow (2) 45,000 4,740

He received a loan of GHS 10,000.00 at a rate of 10% payable within 24 months. Assume that the statutory rate is 25% p.a.

He donated GH 5,000 to Ghana Heart Foundation during the year.

GH 200 monthly deduction is made at source for his mortgage interest.

Special retirement package of which he contributes 10% of basic salary, which the company pays 10% of his basic salary.

Required

(a) Compute the chargeable income of Godwin for the 2012 year of assessment.

(b) determine his (take home ) pay for the 2012 year of assessment.

Tax Rate

GH %

First 1,200 0

Next 420 5

Next 1,104 10

Next 23,196 17.5

Exceeding 25920 25