Question One John and Paul are friends who were residents in Germany for many years. They returned to Ghana on 20th June 2019. They are however contemplating which sector of the Economy to invest in. Upon careful consideration, they decided to invest in any of the following sectors: Agriculture Manufacturing or Real estates

Required: What advice would you give to John and Paul to enable them make a firm decision (4 marks)

Bojoo Company Ltd has the following summarized Income Statement relating to 2018 year of assessment. GHC Revenue 100,000 Cost of Sales 65,000 Gross profit 35,000 Operating expenses 20,000 Net profit 15,000

Upon a closer scrutiny, the following came up: i) Dividend net of withholding tax received from A Ltd was GH10,000. The amount received was added to revenue above. Bojoo Ltd has 10% equity interest in A Ltd. ii) Bad debts of GH1,000 was recovered. This was adjusted to the Income Surplus Account. iii) A penalty of GH2,000 was paid and has been added to operating cost to determine the net profit as disclosed. iv) Capital allowance agreed with Ghana Revenue Authority was GH1,000.00 and depreciation of GH1,300 was added to operating cost. v) Taxes paid in previous quarters amounting to GH1,200 was added to operating cost to determine the net profit. vi) It came to light that an amount of GH11,400 net of 5% withholding tax relating to supply of goods was not brought into the accounts at all on account of omission. The withholding tax was certified correct.

Required: Comment on the amounts and the reasons for the inclusion and or non-inclusion of the transactions in the determination of the income, and determine the tax payable by the company. (6 Marks)

Stonebwoy, a Ghanaian musician, has been invited to perform a live concert for 2 days beginning 20th of June 2020 in Zorich Arena, Armstadam Holland for a fee of 15,000 Euro. Per the letter of invitation, the fee will be subjected to a deduction of 1,200 Euro in line with the countrys tax rules. Stonebwoy will travel with his wife and their only child and he intends to deposit the proceeds into his foreign interest bearing account in Armstadam for one year before deciding on what to do with it.

Required: with the aid of appropriate illustrations, explain the tax implications, if any, to the musician in accordance with the Income Tax Act. (6 Marks) Tax, when it becomes due and payable, is a debt due to GRA and is payable to the Commissioner-General. Required: Examine the rules available to the Commissioner-General in the recovery of unpaid tax. (6 Marks) Whatever the Domestic Tax Revenue Division loses by way of under-invoicing, Customs Division gains by way of over-invoicing. Required: how true is this statement? What measures are available to both Domestic Tax Revenue Division and Customs Division to counteract such practices? (4 Marks)

Examine the extent to which the Commissioner General can use the following means as anti-avoidance tools in a tax avoidance practice. Income splitting Transfer pricing Thin capitalization (4 Marks)

(TOTAL 30 MARKS)

Question Two

The Commissioner-General of the Ghana Revenue Authority expects persons conducting business with Related Parties to ensure that the transaction is at arms length. Required: Examine the arms length principle and its significance in taxation. (3 marks)

Discuss the rationale for the shift from provisional assessment to self assessment and illustrate the circumstances that may impose a penalty on the self assessed tax payer. (4 Marks) Bashito Ltd and Pachanga Ltd are companies in the Agricultural and Manufacturing industry respectfully. Bashito acquired 35% of the ordinary shares of Pachanga in 2017 year of assessment. In May 2019, Bashito transferred some of its trading inventory to Pachanga for GHC 720,000. The goods would have cost Pachanga GHC 1,540,000 on the open market.

Required: Explain the implications of the above and how the Domestic tax Division of the GRA would treat the transaction for tax purposes. (5 Marks)

The Government of Ghana intends to discourage the importation of Television Sets so as to create local demand for Ghanaian made Kantanka Television sets as part of efforts to Grow Made in Ghana Products.

The following data is relevant: 4,000 pieces of Television Sets at a cost of GHC 2,200 per one were imported in March 2019 from USA by Kamdas Enterprise. The cost of freight was GHC 100 per a television set via KLM airlile.

Additional Information: Rate of duty 20% Rate of duty: GHC 80 per a television set Required: with the aid of relevant calculations, advise the government on which method would help achieve the government intended action and why. (8 Marks) (i )Under what circumstances will a taxable person be entitled to a tax refund or tax credit where the amount of input tax which is deductible exceeds the amount of output tax due in respect of the tax period. (3 Marks)

(ii) Zacky Company Limited has approached you to assist their company to comply with the Value Added Tax regime in Ghana. They have asked you specifically to assist in the area of VAT Returns and Payment of the related tax. Required: Advise the company on the related requirements and what is expected of them as a VAT trader with respect to VAT returns and date of payment of the tax. (3 Marks)

An overseas based corporate headquarters of an organization invoices the local (Ghana) subsidiary with head office administrative charges in a given financial year.

Required: Outline the practical tax implications of this transaction. (4 Marks)

(TOTAL 30 MARKS)

Please humbly need the answers to the above questions.To be submitted tomorrow 2nd June,2020 around 5:00pm. Kindly help me out.