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