The managing Director of SUSUKA Insurance Ltd. presented a draft of the company financial statement for the year end 31^st December 2016. The details are as follows:

GHS

Premium returned                                                                   14,000

Reinsurance recoveries                                                           43,000

Gross premium received                                                         980,000

Reinsurance premium paid                                                     25,000

Claims settled and paid                                                           400,000

Commissions to agents                                                           18,000

Dividend received                                                                   22,500

General and administration expenses                                     44,800

Investment in Treasury Bills                                                   737,200

Reserve for unexpired risk created for the previous year amounted to GHS 474,500. It is the policy of the company to estimate reserve for unexpired risk at 40%on premium earned during the year. The company was granted a total capital allowance of GHS 137,800.

Required: Determined the Chargeable Income for SUSUKA Insurance Ltd on the basis that it deals in general business.                                                           

Below are extracts of the accounts of Safeway Insurance Co. Ltd. which incorporated the Life Assurance from the Non-Life, for the year ended 31/12/05

SHORT TERM

                                                                                                                      GH¢      

              Gross premiums received                                                        5,000,000

              Claims settled during the year                                                    600,000

              Reinsurance premiums paid                                                       400,000                              

              Salaries and wages                                                                   1,200,000

              General and administration expenses                                         200,000

              Commission paid to agents                                                             1,000

              Recoveries under reinsurance                                                     300,000

              Premiums returned to clients                                                          2,500

              Interest earned on loans                                                           2,100,000

              Capital allowance claimable                                                       140,000                           

              Reserve at close of previous year                                            2,400,000

 

Note Reserve is calculated at 40% of net premium income.

LIFE    

                                                                                                                      GH¢

                 Interest on treasury bills                                                         950,000

                 Interest from HFC Unit Trust                                                 500,000

                 General and administration expenses                                     620,000

                 Salaries and wages                                                                  900,000

                 Capital allowance claimable                                                     30,000   

 

Required 

Find the tax payable by the insurance company. Use tax rate of 28%.            

b) Explain the difference in the Computation of the tax payable by the life insurance company as opposed to the General.   

c) Distinguish between Customs and Excise                                

 Distinguish between Specific and Ad valorem Duties