May 2019 Q3 c.
Your senior brother has stayed in the United Kingdom for more than 20 years and would like to return to Ghana and establish a business. He is confused as to which area to invest to maximise the benefits from tax planning.
He has been told that you are undertaking a course in Taxation and would like to have your explanation and the tax benefits if any from investing in the following areas:
i) Farming (2 marks)
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- The income of farming activity or business conducted wholly in Ghana shall be subject to tax temporary concessions. The following constitutes farming activities:
- In the case of farming tree crops (i.e. coconut, coffee, oil palm, rubber, and shear nut), income from the business for a period of ten years of assessment commencing from and including the year during which the first harvest of crops occurs
- In the case of farming livestock (excluding cattle), fish or cash crops, income from the business for a period of five years of assessment commencing from and including the year during which the business commences; and
- In the case of farming cattle, income from the business for the period of ten years of assessment commencing from and including the year during which the business commences.
The above activities are subject to tax at the rate of 1% during the temporary concessions of each of them when they make income. (Any 4 points)
ii) Agro-Processing Business (2 marks)
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- The income of a person from an agro processing business conducted wholly in Ghana is subject to tax at the rate of 1% for a period of five years of assessment commencing from and including the year in which commercial production commences.
- Agro processing business means the business of processing crops, fish or livestock produced, caught or raised in Ghana from their raw state into an edible canned or packaged product