1. chargeable income and assessable income computations

1. Patrick Afrifa was employed as a District Finance Officer of KNUST IDL District Assembly on 1st October, 2010 on a salary scale of GH¢ 12,000 x GH¢6,000 – GH¢42,000.

His service conditions include the following:
• Provision of a Land cruiser Prado Vehicle for both official and private purposes and a cash allowance of GH?100 each week for fuel for 48 weeks
• Provision of a well-furnished accommodation at the company premises for which he pays 5% of his basic salary as rent to his employer.
• A yearly performance bonus of 10% of his annual basic salary
• A monthly overtime allowance of GH¢312.50
• 2 Security personnel for day and night, each receiving monthly salary of GH¢500
• Unaccountable monthly entertainment allowance of GH¢200.00

His Returns submitted to Ghana Revenue Authority (GRA) on 31st March, 2015 in respect of 2014 Year of Assessment show the following unconsolidated allowances and benefits:
GH¢
• Special Allowance for 2014 2,400
• Accountable entertainment allowance (per month) 150
• Lunch Subsidy (per month) 200
• House help allowance (per month) 400
• Duty post allowance (per month) 150
• Risk Allowance 7.5% of Basic Salary
• Inconvenience allowance 12.5% of Basic Salary
• Utility allowance 15.0% of Basic Salary

His employer provided him with a 24” Sony Colour TV as a best worker award. It cost the company GH¢450

Patrick however disposed of the TV for GH¢432.5 to Dora since he already has two Colour TV sets.

He contributed GH¢187.50 each month towards Social Security Fund

Patrick has two brothers (Andrew and Godfred). He also has five children who are all attending Senior High Schools in Kumasi and Cape Coast.

His returns indicated that he financed the following Life Assurance Policies in 2014:
Insured Insurance Co Premium per Annum (GH¢) Capital Sum Assured (GH¢)
Self Vanguard 3,500 4,500
Andrew SIC 3,500 4,000
Godfred SIC 2,500 3,000
Self SIC 5,500 5,000
Self Star 12,500 13,000

Patrick earned an interest of GH¢18,000 on his Adom Flexi savings account with Pacific savings and Loan Bank

He received endorsement fees of GH¢ 5,400 (Net of 10% WHT) and Director’s fees of GH¢ 16,200 (Net of 10% WHT).
Agreed profit for the year from his Consultancy Services was GH¢ 12,000 for which he paid GH¢600.00 as tax installment
A tax of GH¢16,346.25 was withheld from his salary during the year.

Required: For 2014 Year of Assessment, compute Patrick Afrifa’s:
a) Assessable income from employment
b) Total Assessable Income
c) Chargeable Income
d) Tax liability from his employment income
e) Net Tax Payable

Show clearly all workings and state appropriate comments where applicable (especially for all information not relevant for your computations)