a) The Managing Director of KAWONANTOSO Limited, producers of Alata Soup (Local Soup) for the Ghanaian market, returned from a Tax Seminar organized by the Ghana Chartered Institute of Taxation (CITG) and called you, the Tax Manager of KAWONANTOSO into his office and stated “KAWONANTOSO Company Limited has been short changed over the years on account of tax losses”. He said that carryover of losses as an incentive was discussed at length at the Tax Seminar. He went further to add that, KAWONANTOSO Limited has not carried over its tax losses as provided for in the tax laws. He states, “Tax Manager, please act now by writing to Ghana Revenue Authority to recognize the tax losses of KAWONANTOSO, since the losses are within the five years in order to help reduce the taxes of the Company now that the Company is making profits”, he ended. You are required to: 

Explain clearly the provision of tax laws on carryover of losses and to what extent do you agree with the position of the KAWONANTOSO Company Limited? (9 marks) 

b) Shares of a resident company are classified as chargeable assets under gains and losses on realization. 

Under what circumstances will shares not be described as chargeable assets under the provision of the gains and losses on realization? (4 marks) 

c) Barclays Bank Ghana Limited Staff have issued with share by the Parent Company in United Kingdom. The shares have been vested and are available to be sold immediately by the beneficiary staff. 

Requirement: With the support of the provisions of the relevant tax laws, how will the above be treated for tax purpose, if any?

Answer rating: 100% (QA)

Part A The following are the supply of Taxation for Companies in Ghana Resident companies are taxed on their income no matter the source of such Incom... View the full answer