- 6 Marks
Question
A globally recognized Training and Research Centre on peacekeeping and peace support operations in Ghana has engaged you as a tax consultant to provide tax opinion on how the following transactions should be treated:
i. The Centre engages part-time lecturers on its Master’s Programmes which are run on a modular basis and run for a one-year period. Payments for the fees of these lecturers are based on the number of hours done.
(2 marks)
ii. The Centre engages facilitators who are to teach and direct the flow of class for courses that run for a short period. Payments for their services are based on hourly/daily work done.
(2 marks)
iii. The Centre engages experts/consultants to assist in developing new courses or review existing courses being run by the centre or undertake any other assignment as and when required by the Centre. Payment to this category of persons is also dependent on the duration of the task and based on man-days.
(2 marks)
Answer
i. Part-time lecturers should be subject to a final withholding tax at the rate of 10% under section (84)(a) of the Internal Revenue Act 2000, Act 592.
(2 marks)
ii. The engagement of facilitators to teach and direct the flow is a clear case of part-time teaching and should be subject to a withholding tax at the rate of 10%.
(2 marks)
iii. This is a clear case of a contract for service, and under section 84(2)(b), it is a clear case of the supply of service and should be subject to a 5% withholding tax paid to resident persons. It is not a final tax.
(2 marks)
- Tags: Contract for Service, Experts, Facilitators, Part-time lecturers, Withholding Tax
- Level: Level 3
- Topic: Business income - Corporate income tax
- Series: NOV 2015
- Uploader: Joseph