Question Tag: Self Assessment.

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  • 2 Marks

PT – Nov 2019 – L2 – Q1c – Corporate Tax Liabilities

Determines the amount of tax underpayment for Naab Ltd to be subjected to interest computation.

c) The following data is relevant to Naab Ltd tax affairs for 2018 year of assessment:

Self-assessment returns submitted:

Tax paid on self-assessment: GH¢1,000,000
Chargeable income: GH¢4,000,000
Actual Returns submitted:

Chargeable Income: GH¢6,000,000
Correct amount – Tax payable: GH¢1,500,000

Required:
What is the amount of tax underpayment to be subject to interest computation?
(2 marks)

Computation of underpayment to be subjected to

Therefore, underpayment subject to tax is 350,000
(2 marks)

  • 10 Marks

PT – July 2023 – L2 – Q1c – Tax Administration

Explanation of self-assessment, pre-emptive assessment, administrative assessment, and tax audit assessment.

Explain the following as used in tax administration:
i) Self-Assessment
ii) Pre-emptive Assessment
iii) Administrative Assessment
iv) Tax Audit Assessment

(10 marks)

i) Self-Assessment:

  • This is when taxpayers calculate their own tax liabilities and pay taxes based on their estimates. Taxpayers are responsible for filing tax returns and making payments in compliance with the tax laws.
    (2.5 marks)

ii) Pre-emptive Assessment:

  • This occurs when the Commissioner-General makes an early assessment of tax payable, usually when revenue is at risk. It may be issued when the taxpayer is about to leave the country, cease business activities, or commit a tax offense.
    (2.5 marks)

iii) Administrative Assessment:

  • This assessment is conducted by tax authorities when a taxpayer fails to file a return or when it is necessary to adjust a self-assessment. The Commissioner-General uses the information available to calculate and impose the tax liability.
    (2.5 marks)

iv) Tax Audit Assessment:

  • A tax audit assessment is performed by the tax authority to verify that a taxpayer’s reported financial records and tax returns are accurate. It aims to ensure compliance with tax laws and may reveal additional tax liabilities.
    (2.5 marks)
  • 5 Marks

PT – Nov 2021 – L2 – Q1d – Tax Administration

Explain the advantages of self-assessment for both the government and the taxpayer.

State TWO (2) advantages each of self-assessment to the government and the taxpayer. (5 marks)

 

Advantages to the Government:

  • It ensures prompt payment of taxes.
  • It avoids delays in the issuance of assessments.
  • It saves time for Revenue Officers that can be used for other equally important work.
  • It reduces collection costs for the Ghana Revenue Authority.
    (Any 2 points @ 1.25 marks each = 2.5 marks)

Advantages to the Taxpayer:

  • Taxpayers know their business and circumstances better and can thus make the best of estimates.
  • The taxpayers are given the benefit to revise their estimates.
  • There is a healthy interaction between the taxpayers and the Ghana Revenue Authority.
  • It promotes accurate record keeping for the taxpayers.
  • 4 Marks

PT – Nov 2020 – L2 – Q1e – Tax Administration

Explains steps to file tax returns for a sole proprietor and reasons for an adjusted assessment by the Commissioner-General.

Paa Tee is a sole proprietor and has not filed his tax returns for 2018 year of assessment as at April 1, 2019. He has approached you to file his tax returns for him and from all indications, he has paid all his taxes based on the self-assessment estimate.

Required:
i) What steps (if any) will you take to enable Paa Tee file his tax return and are there any financial implications in filing? (2 marks)
ii) What factors may give rise to an adjusted assessment by the Commissioner-General?

i) I would help Paa Tee apply for an extension if there are valid reasons for doing so, but the application must be made before the deadline of 30th April 2019. There is no financial implication if the filing is done on or before 30th April 2019, or if an extension is granted by the Ghana Revenue Authority.
(2 marks)

ii) The factors that may give rise to an adjusted assessment by the Commissioner-General are:

  • Failure to file a tax return.
  • Discovery of a case of fraud.
  • Willful default.
  • Serious omission.
  • 6 Marks

AT – Nov 2018 – L3 – Q4b – Tax Administration

Evaluation of the benefits of the self-assessment regime for taxpayers and the tax authority.

The Income Tax Act, 2015 (Act 896), as amended, requires all taxpayers to be on self-assessment as taxpayers know better their circumstances for tax purposes.

Required:
Evaluate FOUR (4) benefits of the self-assessment regime.

The self-assessment regime offers the following benefits:

  1. Increased accuracy and fairness
    • Taxpayers are in the best position to know their income and circumstances, which leads to more accurate and fair tax calculations. Self-assessment allows them to report their tax liabilities more accurately, based on their specific situation.
  2. Reduced disputes and objections
    • Since taxpayers are involved in determining their tax liabilities, there is a lower likelihood of disputes or objections over tax assessments. This can result in smoother interactions between the tax authority and taxpayers.
  3. Faster collection of taxes
    • Self-assessment encourages timely and accurate filing of tax returns, allowing the tax authority to collect taxes earlier, which improves cash flow for the government and aids in achieving revenue targets.
  4. Promotes voluntary compliance
    • By empowering taxpayers to assess their own tax obligations, the self-assessment regime fosters a culture of voluntary compliance. This reduces the need for aggressive tax enforcement actions and penalties.
  • 10 Marks

AT – Nov 2015 – L3 – Q2c – Tax administration in Ghana

Explaining the self-assessment tax regime and benefits to taxpayers under Ghana’s tax administration system.

Ghana Revenue Authority has embarked on comprehensive reforms geared towards “Voluntary Tax Compliance.” Among the reforms is requesting taxpayers to determine their tax liabilities and consequently the tax payable. This has been criticized by some taxpayers as increasing the cost of compliance or doing business. You have been engaged by the Ministry of Finance to help Ghana Revenue Authority educate taxpayers on these reforms.

You are required to explain to taxpayers:

i. Self-Assessment Tax Regime.
(4 marks)

ii. Critically examine the benefits taxpayers stand to derive from the Self-Assessment Regime that has become part of tax administration in Ghana.
(6 marks)

i. Self-Assessment Tax Regime
Self-assessment regime is a type of assessment regime where a taxpayer is made responsible for accurately computing and reporting their tax liability. The taxpayers are required to estimate their taxable income and the tax thereon for the year of assessment. Taxpayers on self-assessment may file revisions of their estimates and pay taxes in accordance with section 80 of the Internal Revenue Act 2000, Act 592 accordingly.

i. Persons on self assessment are persons specified in a notice published in the Gazette
or in a print media by the Commissioner General
ii. An estimate furnished under a revised estimate to the Commissioner General shall
remain in force until revised by the person together with a statement of reason for
the revision
iii. Where the Commissioner General is not satisfied with the estimate or revised
estimate, the Commissioner General may set aside the estimated assessment and
provisionally assess the person
(4 marks)

ii. Benefits of Self-Assessment
The benefits include but are not limited to the following:

  1. The taxpayer is given the opportunity to make the estimate, which engenders trust. This makes the taxpayer confident in the system and helps them own their tax affairs.
  2. Taxpayers know their personal circumstances and can make better estimates under no duress.
  3. The taxpayer is free to revise estimates to avoid penalties as dictated by their business circumstances.
  4. It reduces the cost of doing business as there is no need for objections to provisional assessments.
  5. It builds the technical skill of taxpayers over time.
  6. It promotes healthy interaction between taxpayers and the Ghana Revenue Authority (GRA).
  7. It encourages accurate record-keeping by the taxpayers, which is crucial for self-assessment.
    (6 marks for any 6 points)
  • 14 Marks

AT – May 2016 – L3 – Q3a – Tax administration in Ghana

Explain the terms “Provisional Assessment” and “Self Assessment” in tax administration

a)
i) Explain the terms “Provisional Assessment” and “Self Assessment” in tax administration. (6 marks)

ii) Discuss the rationale for the shift from Provisional Assessment to Self Assessment. (8 marks)

a)
i) Provisional Assessment

  • It is an assessment that emanates from the office of the Commissioner-General, which indicates a person’s tax liability based on the Commissioner-General’s best judgment.
  • It indicates the chargeable income and the tax charged.
  • It also indicates the manner of objection.
    (3 marks)

Self Assessment

  • This is a mode of assessment where the onus of determining the tax liability and the payment of the tax is on the taxpayer.
  • The taxpayer is expected to furnish the Commissioner with an estimate of the chargeable income and the tax liability at the commencement of his basis period.
    (3 marks)

ii) Rationale for the Shift from Provisional Assessment to Self Assessment

  • Under provisional assessment, there is usually a delay in the issuance and service of the notice of assessment. Self-assessment avoids delays since the assessment is made by the taxpayer.
  • Under self-assessment, there is trust between the taxpayer and the tax administrator.
  • There is a high frequency of objection under provisional assessment, but self-assessment minimizes the rate of objection since the taxpayer is involved in the determination of the tax liability.
  • The cost of collection is higher under provisional assessment, but self-assessment reduces collection costs to the Revenue.
  • Under provisional assessment, officers are much occupied in issuing notices and have less time for other matters, but self-assessment saves time for Revenue Officers, allowing them to review more significant cases.
  • Self-assessment tends to make taxpayers more conscious of their tax obligations since they are involved in the process.
  • Self-assessment promotes tax compliance and good citizenship.
    (8 marks)

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