QUESTION 1 a) The use of taxation is an essential tool that has helped and hurt economies worldwide including that of the developing countries. Required: Identify and explain FIVE (5) social impacts of taxation in Ghana. (10 marks) b) The use of debt by countries to finance national budget has engaged the attention of economists, tax practitioners and the ordinary man in the interest regarding its impact on the economy. While some prefer domestic debt, others are making a case for foreign debts as part of governments fiscal policy. Required: Present a report on the benefits to a government for going in for a foreign debt as opposed to going in for domestic debt as a support to revenue base from taxes. (10 marks) c) Tax reforms have characterised Ashanti taxation. Countries have embarked on various reforms geared towards improvement in tax revenue to help provide the basis for infrastructural and guarantee sustainable development. Ghana is not been left out in these critical tax reforms. Tax administration in Ghana therefore has seen a number of reforms since the 1960s, with the most recent being the integration of the Revenue Agencies to an Authority to act as a one stop shop as per the Ghana Revenue Authority Act, 2009 (Act 791). Required: Evaluate Five (5) roles played by the Ghana Revenue Authority in the management of the Ghanaian economy. (10 marks) d) In line with best practices, the Ghana Revenue Authority is mandated to encourage voluntary tax compliance to shore up revenue. This, among others includes responding to taxpayers requests promptly. Required: Present a report to client explaining to him/her the term class ruling and its relevance. (10 marks) [Total 40 marks] QUESTION 2 Below is the income statement of Ashanti Feed Manufacturing Company Limited, located in Akropong in the Ashanti Region of Ghana. The statement covers the year ended 31/12/2019. GH000 GH 000 Gross Profit 720,750 Rent Income 156, 250 Other Income 25,000 902,000 Less: Management Salaries 43,750 Staff Salaries 71,250 Hire of Equipment 18,125 Depreciation 7,500 Casual Labour 10,500 Office Rent 9,000 Vehicle Repairs 19,500 Business Promotions 5,250 Donations 11,375 Repairs of Factory Premises 28,500 Office Expenses 22,500 Bad Debts 73,750 Advertisements 1,500 322,500 Net Profit 579,500 Notes to the Accounts: 1. Other income includes profit on disposal of fixtures and fittings amounting to GH15,000,000. 2. Casual Labour is made up of Factory Hands and Wages of employees in Directors Private Property amounting to GH6,250,000 and GH4,250,000 respectively. 3. Vehicle Repairs includes cost of new engine of GH4,500,000, fuel & lubricants of GH8,750,000 and Tyres and Tubes of GH6,250,000. 4. Donations consist of the following: Kotoko Football Club GH7,500,000, National Trust Fund GH125,000 and Bereaved members of staff GH3,750,000 as part of funeral policy approved by the board. 5. Business Promotions: - Wedding reception for Directors wedding day GH4,500,000 - Cost of entertaining business partners GH1,750,000 6. Repairs to Factory premises: GH - Cost of New tiles for floor 16, 000,000 - New gates for factory 10,000,000 - Repair of cracks in the wall 2,500,000 7. Office Expenses includes New personal computer and stationary amounting to GH18,750,000 and GH3,750,000 respectively. 8. Office rent paid of GH 9,000,000 represents two years rent for the period ending 31st December 2019. 9. The written value of the companys chargeable assets as at 31/12/2018 was as follows: GH Building (cost 6,250,000) 5,000,000 Motor Vehicles 22,500,000 Plant and Machinery 7,500,000 Computers 5,000,000 Required: (a) Determine the Companys Chargeable income for the 2019 year of assessment. (15 marks) (b) Calculate the tax liability of the company for 2019 assessment year, if any (5 marks) [Total 20 marks]