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MORE TAX ACADEMY-MOCK EXAMS- direct Tax

MORE TAX ACADEMY


CHARTERED INSTITUTE OF TAXATION
(GHANA)

PROFESSIONAL EXAMINATIONS

FEB 2018 EXAMINATIONS


(MOCK EXAMS)

PAPER 4 – direct TAXATION

TIME ALLOWED: 1hr 30 minutes

ANSWER ALL QUESTIONS

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MORE TAX ACADEMY-MOCK EXAMS- direct Tax

Question 1
(a) Distinguish between Provisional Assessment and Self Assessment.
(b) State any Five (5) advantages of Self-Assessment over Provisional
Assessment.
c) List any FIVE Badges or Indicators of Trade and state any one decided Tax Case
in respect of each.
(d) State the significance of the Auditor’s Certificate to Examination of Accounts
for tax purposes.

Question 2
a) State the conditions to be satisfied by a taxpayer to qualify for Capital Allowance.
(8 marks)

b) WARABEBA LTD commenced a trading business on 1st March 2010


preparing accounts to 31st December each year.
The following assets were acquired or bought and used in the business.

ASSET DATE OF ACQUISITION COST IN GHANA CEDIS


Office Building 20/1/10 250,000
Office Equipment 12/2/10 12,000
2 Computers 10/3/10 5,000
Furniture and Fittings 17/3/10 18,500
Motor Van 26/9/10 29,000
Avensis Saloon Car 6/5/11 35,000
Additional to Building 20/8/12 80,000
One computer was sold for GH¢2,150.00 on 31st December, 2012. Profits declared
up to 31st December were as follows:
GH¢
Period to 31/12/10 84,000
Year to 31/12/11 192,000
Year to 31/12/12 215,000

Required
Compute the company’s Capital Allowances and Assessable Incomes for all the
relevant years.
N.B. Work to the nearest cedi

Question 3
Mr. Samuel Danso was appointed the Finance Manager of Hope Ventures Ltd on a salary of
GH¢42,000 a year with effect from 1st January, 2014.
a) Responsibility Allowance – GH¢500 a month
b) Medical Allowance GH¢500 a month
c) Non-Accountable Entertainment Allowance – GH¢50 a month

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MORE TAX ACADEMY-MOCK EXAMS- direct Tax

Question 4

The Company provided him with furnished accommodation at Manet Estate in Accra and also
a car with free supply of fuel. He used the car for both business and private purposes
He is married and has three children. The eldest son is in Lagos University in Nigeria. His other
son is at Accra Academy SHS and the daughter is at Aburi Girls SHS.

He maintains all the children in addition to his 58 year old mother. He contributes 5.5% of his
salary to the Mandatory Pension Scheme.

REQUIRED
Compete the tax liability of Mr. Samuel Danso for 2014 Year of Assessment.

INDIVIDUAL TAX RATE FOR 2014 Y/A


First GH¢ 1, 584 Free
Next GH¢ 792 @ 5%
Next GH¢ 1, 104 @ 10%
Next GH¢ 28, 200 @ 17.5%
Exceeding GH¢ 31, 680 @ 25%