A transparency note before we begin: today’s past question is sourced from a real, uploaded ICAG Principles of Taxation past paper. Value Added Tax, however, is core, examinable content across CITG, ADIT, and ICAG alike — all governed by the same VAT Act, 2013 (Act 870) — so the technique transfers directly to your paper.
The Question
Five scenarios built around one theme: spotting VAT where it doesn’t look obvious. Candidates were asked to define “taxable activity,” list five examples, and then work through the VAT implications of a repossession, a cancelled deposit, an agent-versus-auctioneer sale, and taxable gifts received by an individual.
The Full Worked Answer
A taxable activity is any activity carried on in Ghana, or partly in Ghana, whether or not for profit, that involves or is intended to involve a supply of goods or services to another person for consideration.
On repossession: when goods are repossessed under a credit agreement, that repossession is itself treated as a supply by the debtor to the person repossessing them. If the debtor is VAT-registered, the supply falls within their taxable activity, unless the goods weren’t part of the assets used in that activity.
On the cancelled deposit: a deposit that is not for a returnable container becomes a taxable supply the moment it is cancelled or forfeited — meaning a deposit triggers VAT at the point the agreement was cancelled, even though the sale never completed.
On agents and auctioneers: in ordinary agency, the principal — not the agent — is the taxable person. But where the agent is an auctioneer, the rule flips entirely: the auctioneer becomes the taxable person on goods sold at auction.
On taxable gifts: Ghana’s tax law classifies gifts by their source. Gifts tied to employment are taxed as employment income at graduated rates; gifts tied to business are taxed at business tax rates; gifts tied to investment fall under investment income rules.
Exam tip: Whenever a tax question describes a repossession, a cancelled deposit, an auction, or a gift, your first instinct should be: “this is a VAT trigger event, not just a commercial event.” Examiners build entire questions around this exact recognition gap.
Examiner Comments
Direct from the Chief Examiner’s Report: “The definition of taxable activity was so difficult for almost all the candidates. This is basics of VAT and candidates should be in the position to answer… The principles governing VAT on repossession, goods on deposits, and goods supplied by agents were poorly answered.”
Conclusion
This question rewards candidates who understand that VAT isn’t confined to straightforward sales — it follows the substance of a transaction, wherever it’s hiding. Master the recognition habit, and questions like this one become a source of easy, reliable marks rather than a trap.
Ready to Go Deeper?
This question type — and every other VAT and indirect tax past question — is covered in full inside the Passkoguru Past Question Revision Kit.
Get past questions at Passkoguru.com →
Preparing for CITG, ICAG, or ADIT? Join students getting free weekly study tips and exam breakdowns from Bill Cobby Impriam — subscribe to the newsletter from the homepage. Hardcopy tax textbook available at CITG offices and agents nationwide — DM or comment BOOK.
Comments are closed.