Question

Multinational company based in Ghana and US has recently won a contract to
construct 215 km of road in Ghana. The management of the company is considering a
salary package for three top executive officials; the MD (US citizen), DMD
(Technical) a Ghanaian and CFO (Tax) a UK citizen. The salary package is detailed
as follows;
Name Position Annual
Salary
Salary
Allocated to
Ghana
Salary
allocated to
other
countries
Work time
allocated to
Ghana for
the year
GHS GHS GHS
Cuddle C MD 960,000 144,000 716,000 15%
Ansah F DMD 840,000 672,000 168,000 80%
Donald D CFO 840,000 630,000 210,000 75%
The following additional information was provided;
1. Work time allocated to Ghana measures time input for work by the company
management staff seconded to Ghana location for the year. 2. The company has 10 work stations in 5 countries, therefore management
apportioned the MD's remunerations proportionately over all the jurisdiction
on time basis. He hardly visit all construction site each year. 3. Based on the level of activity within each jurisdiction, the company allocates
80% of Ansah's salary remuneration to Ghana's operation whilst 15% of the
MD's salary payment will be allocated to Ghana. Ansah stays at the work site, uses the company's car and is permitted to visit his hometown on weekends. Donald stays in Accra and is allocated to use free car and as often as possible
visit to the work site. The company provides accommodation with soft
furnishing to to tier staff in Accra and at work site. The company has written to you as their tax consultant for advise on the Ghana tax
implications the packages of these staff. Required
Discuss the Ghana tax implication of salary payments expected to be made to the
three top officials and compute any expected taxes due on the earnings using 2017
employee tax rates
2017 employee tax rates:
Non Residence individual 20%
Residence individual
Chargeable
income
Rate
GHS %
First 2,592 0
Next 1,296 5
Next 1,812 10
Next 33,180 17.5
Exceeding 38,880 25