Kofi Abunoabuno who is Managing Director of YEBUDIDI COMPANY

st

LIMITED. He received a salary of Ghc360,000 for the year ended 31

2018. He contributes to social security. He stays in his own house but the company pays for the wages of his watchman which was Ghc12,000 for the 2018. In addition, the company paid his water and electricity bill which amount to Ghc8,000 during the same period. He enjoys rent allowance of 20% of his basic salary.

He has a Life Assurance with the Enterprise Assurance Company (ELAC) with following details:

Capital sum Ghc150,000

Annual premium Ghc18,000

He is married with four children. The first one is the University of Professional Studies, Accra (UPSA), the second and third are in Accra Academy and the last one at Tema SOS (KG

Required:

a) Using annual income tax rates for resident individuals for 2018 year of assessment,

b) Compute his chargeable income and tax liability for 2018.

USE THE TAX RATES BELOW TO DETERMINE THE TAX LIABILITY.

December,

Yearly before July 2018

Chargeable Income

Rate (%)

Tax

First

2,592

0

0

Next

1,296

5

64.8

Next

1,812

10

181.20

Next

33,180

17.5

5,806.5

Exceeding

38,880

25