Question 1

a. Faith Charity Foundation (Faith) is an approved Ghanaian Non-Governmental Organisation which provides care and support to homeless children. During the year ended 31st December 2018 the income of the foundation reduced by 25%, this created a financial crisis for the foundation to cover its core expenditures. The foundation has enough space it is not using currently. Management decided to provide a venue for big programs for fees to support the children education in 2019. They added that, since celebrities may be present, it will serve as a motivation to these homeless children. They also made a projection about the selling of un-used equipment for GH 200,000 in the 2019 year. ABC Hotel Ltd which commenced operation in the year 2018 has promised the foundation an amount of 22% of its assessed annual profit before tax for the 2019 year of assessment. The foundation has included these arrangements in its budget for the 2019 year. Required i. Explain the tax implications with the projected incomes included in Faiths budget for 2019 year by the management. ii. Estimate the amount of tax payable (in percentage) by ABC Limited and determine the effect of its contribution to Faith Foundation on tax payable to GRA for the year of assessment. b. Twist is USA based citizen who was employed by Crops Scientists Institute in USA. In 2020, Twist was seconded to Ghana from the Crops Scientists Institute in USA as a Crop Scientist to Crop Research Institute in Ghana, starting from 1 August, 2020. He came to Ghana purposely of serving the employer and being his first time of such employment; he was so excited to receive his appointment letter. The Crop Research Institute in Ghana stated in the appointment letter that the institute will pay for his airfares to cover his five member family including himself. The institute bought tickets valued at 6,000 per head and issued them to Twist. Required Briefly explain the tax implication on the Airfare paid to Twist by Crop Research Institute in Ghana for the year of assessment.