- 10 Marks
Question
c) You have been offered an appointment by Bumu Manufacturing Company (BMC) as Tax Manager responsible for preparing and filing tax returns on behalf of the company. BMC files its returns with the Osu Medium Taxpayers Office of the Ghana Revenue Authority. The company’s Tax Identification Number is C0000261178. The company prepares accounts to 31 December each year.
BMC estimated its chargeable income for the 2019 year of assessment as GH¢3,000,000. Subsequently, the company secured a Government contract and anticipates in the third (3rd) quarter that its chargeable income would be GH¢4,500,000.
Additional Information:
Tax paid on account:
1st quarter GH¢100,000
2nd quarter GH¢120,000
3rd quarter GH¢200,000
Required:
Compute the taxes payable for BMC for each quarter.
(10 marks)
Answer
c) Taxes payable for BMC for each quarter
Where A = Tax payable (Annual tax payable),
B = All withholding up to the end of the
respective quarter + any other taxes paid in respect of that annual tax payable,
C = the number quarters remaining
1st Instalment
A = 25% X GH¢3,000,000 = GH¢750,000
B = 100,000
C = 4
Instalment payment = (750,000 – 100,000)/4 = GH¢162,500
2nd Instalment
A = GH¢750,000
B = 100,000 + 120,000 +162,500= 382,500
C = 3
Instalment payment = (750,000 – 382,599)/3 = GH¢122,500
3rd Instalment
A = 25% x GH¢4,500,000 = 1,125,000
B = 100,000 + 162,500 + 120,000 + 122,500 + 200,000 = 705,000
C = 2
Instalment payment = (1,125,000 – 705,000)/2 = GH¢210,000
4th Instalment
A = GH¢1,125,000
B = 705,000 + 210000 = 915,000
C = 1
Instalment payment = (1,125,000 – 915,000)/1 = GH¢210,000
(Marks are evenly spread = 10 marks)
- Topic: Corporate Tax Liabilities, Tax Administration
- Series: APR 2022
- Uploader: Cheoli