QUESTION NINE

Addel Resources Ltd. is a mining company operating in the Alpha mine and Omega mine in Ghana. Alpha mine share a processing plant with Omega mine, and both mines commenced commercial production in 2016. At the close of business on December 31, 2016, Addel Resources Ltd. acquired 10% exploration and production rights in the Sunset mine which is production mine for GH20,000,000.

The highlights of 2016 revenue and expenditure disclosed in tax returns filed by Addel Resources Ltd. Include the following:

Revenuue GHC

Gross income from its operation in 2016 250,000,000

Hedging Income 3,000,000

Interest Income 1,000,000

Consideration realized from the sales of assets 800,000

Gross Dividend from a resident company in which it has 30% voting rights 200,000

Total Revenue 255,000,000

Expenses include the following:

Reconnaissance & Prospecting Cost (Alpha Mine) 45,000,000

Reconnaissance & Prospecting Cost (Omega Mine) 35,000,000

Depreciation 12,000,000

Exploration & Production Rights (Sunset Mine) 20,000,000

Expenses on Hedging transactions 5,000,000

Cost of the assets sold 300,000

Administration Expenses 10,000,000

Profit before tax 100,000,000

Additional Information:

Income Tax Rate for companies 25%

Mineral Income Tax Rate 35%

Mineral Royalty Rate 5%

Capital Allowance Rate 20% on straight line basis

Dividend Withholding Tax Rate 8%

Interest Withholding Tax Rate 8%

Capital Gains Tax 15%

Required:

Compute the tax liability for each tax type that Addel Resources Ltd will be liable to pay in 2016