General Mathematics Paper 2,Nov/Dec. 2014
 Questions: 1 2 3 4 5 6 7 8 9 10 11 12 13 Main
Weakness/Remedies
Strengths

Question 2

A man has a wife and 6 Children and his total income in a year was GH¢ 850.00. He was given the following tax free allowances:
Personal                      GH¢ 120.00;
Wife                           GH¢ 30.00;
Children                       GH¢ 25.00 per child, for a maximum of 4 children;
Medical                        GH¢ 40. 00.
The rest was taxed as follows:
First GH¢ 200.00 at 10%;
Next GH¢ 200.00 at 15%;
Next GH¢ 200.00 at 20%;
Remainder          at 25%.
Calculate his:

• taxable income;
• monthly tax.

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Observation

The Chief Examiner reported that although this question was attempted by majority of the candidates, their performance was poor. Candidates were encouraged to read the questions carefully before answering them so that they can appreciate its demand(s).
Candidates were expected to respond as follows:
Total tax free allowance = 120 + 30 + (25 × 4) + 40  =GH¢ 290.00
Therefore, taxable income = GH¢ (850 – 290) = GH¢ 560.00.
The tax would be deducted as follows:
From the first GH¢ 200.00, tax =  × 200 = GH¢ 20.00. From the next GH¢200.00, tax =  × 200 = GH¢ 30 .00. Remaining taxable income = GH¢(560 – 400) =GH¢ 160.00. Therefore, tax on GH¢ 160.00 =  × 160 = GH¢ 32.00. Total annual tax = 32 + 30 + 20 =GH¢ 82.00. The monthly tax was then obtained as  = GH¢ 6.83