QUESTION TWO

a. ABC Ltd is a company under self-assessment and prepares accounts to 31st March each year. Its estimated chargeable income for the year 2016 was GH 1.2 million. However, the Companys Returns which were submitted to the Large Tax Payers Office at the VAT House on 1st April, 2017 showed a chargeable income of GH1.8 million. During this period, Bank of Ghana policy rate was constant at 24% per annum. ABC Ltd made its first installment payment on 31st March, 2016. Required Compute the Interest payable by the company. (10 marks)

(Hint: Your answers should be in line with section 70 of Revenue Administration Act 2016 (Act 915)) b. Tax administration in Ghana has seen a number of reforms since the 1940s, 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). During each fiscal year, Ghana Revenue Authority generates taxes revenue using both Source based-taxation and Resident based-taxation methods. The Revenues below represent Tax generated by Commissioner General of Ghana Revenue Authority for 2019 year of assessment.

Use it to answer the questions that follow.

GH 000

Other International Trade Taxes 6,500 Excise duties 2,000 Valued Added Tax (VAT) 4,000 Import VAT 3,000 Property taxes 3,000 Vehicle Income Tax Stickers (VITS) 2,000 Petroleum Taxes 1,200 National Health Insurance Levy 2,000 Capital Gain Taxes 7,000 Export and Import Duties 19,000 Excise Tax Stamps 3,000 Corporate Taxes 2,000 PAYE 8,000 Communications Service Tax (CST) 4,000

Total Revenue 88,500 Required i. Outline the responsibility and structure of Domestic Tax Revenue Division (DTRD) (6 marks)

ii. Compute the total taxes collected by this Domestic Tax Revenue Division. (4 marks) iii. Calculate the total taxes collected by Custom Division. (3 marks)

iv. Compute the total taxes collected by Support Service Division. (3 marks)

v. Evaluate how best GRA had been arranging its affairs to achieve low compliance and administrative cost. (4 marks)