QUESTION 1 Lydia Johnson was employed by Styles Limited as a canvasser on a salary scale of GH12,000 x 2,400 16,800 per annum

m with effect from 1st October, 2002. Her entitlements include the following: i. ii. iii. iv. v. Car with fuel She has her own accommodation and was therefore paid an allowance of GH50 in lieu of accommodation. Day and night watchmen each paid GH80 per month. House help paid GH50 per month. Risk allowance GH300 per month.

On 1st July, 2004, she established a boutique operated by her younger sister, Julie. Her declared profits were as follows: Year to 30th June, 2005 Year to 30th June, 2006 Year to 30th June, 2007 GH 7,200 12,000 18,000

She is married with two children at Swedru Secondary School. She is also responsible for the upkeep of her aged mother. Required: Determine the chargeable incomes for the years 2005 and 2006. (20 marks)

QUESTION 2 a) b) A claim for capital allowance was rejected by the inspector of taxes even when the company produced a receipt covering the purchase of the asset. Fresh Foods Limited purchased canned tuna flakes valued at GH20,000 from Star Tuna Limited based in Tema and paid in dollars. Later, Fresh Foods Limited realised that $4,000 worth of the canned tuna flakes purchased were bad. Star Tuna Limited could not replace or refund the amount of $4,000. 1

Fresh Foods Limited made a claim for exchange loss of $4,000. c) d) Mr. Simon Tete is a farmer, transport owner and has substantial rent income. However, his accounts for several years have shown a loss position. Kojo Sampson inherited a house under his uncles will valued at GH30,000. He renovated the house at a cost of GH20,000 and within three months sold it for GH80,000. He used part of the proceeds in importing 100 computers valued at GH35,000.

Required: Comment, stating your reaction to each case. (20 marks)

QUESTION 3 Incomes taxable in Ghana must be income; (i) (ii) (iii) (iv) Accruing in Derived from Brought into Received in Ghana

Required: (a) (b) (c) Explain with examples what these phrases mean. What are the tax implications of each of these incomes? In other words how are incomes from such sources treated for tax purposes? Do you agree that there is always a geographical nexus between income and tax in Ghana? (20 marks)

QUESTION 4 Skyrock Ventures Ltd P. O. Box 021 Osu Accra 24th September 2007 Dear George, Thank you for coming to see me yesterday in response to our advertisement in the Daily Graphic. Since our Legal Adviser resigned in July a great deal of work has piled up and we are anxious to get this cleared as soon as possible. You have indicated during our discussions that you have been dealing with such commercial cases for some time and we are happy to engage you as our Legal Adviser. Our secretary will make available a room and all necessary documents to enable you acquaint yourself with all outstanding cases. Our offices are open from 8.00 a.m. to 5.00 p.m. and you can use our facilities during these hours. Your level of fees is acceptable and we hope you can start work on Monday 1st October, 2007. I look forward to seeing you then. Yours faithfully,

JOE ANSAH (Managing Director)

Required: (a) (b) Discuss whether the conditions in this letter indicate a contract of service or contract for service. List five (5) powers of officers of the Customs Excise and Preventive Service. (20 marks)

QUESTION 5 Gilly Mensah was an international footballer who played for Leeds United in England for several years. In 1996, he put up a building in Dansoman at a cost of GH5,000. He retired from active football in 2001 and came home to settle. He did not like Dansoman very much so he gave the building to his younger brother, Roy Mensah as a gift. He also brought along four saloon cars, four sets of Jerseys and a dozen footballs. He gave one VW Passat car valued at GH10,000 to his former coach, Oto Darko, of Accra Great Olympics as a gift. He gave the jerseys and footballs as gifts to his former club, Accra Gt. Olympics. Since he did not like Dansoman, he built another house at East Legon costing GH25,000 in 2001. In February 2004 the house at East Legon was completely burnt down by fire. Fortunately he had insured the building for GH50,000 and the Insurance Company paid the full amount of GH 50,000. He used GH30,000 out of the amount to acquire another house on the Spintex Road in January, 2005. Required: (a) (b) Determine any taxes payable. Give two (2) circumstances under which the registration of a taxable person can be cancelled by the Commissioner of Value Added Tax (VAT). (20 marks)