Some exam questions fail candidates because the content is genuinely advanced. This one didn’t. The real March 2025 Principles of Taxation Chief Examiner’s Report describes Question Three as containing details that “were very clear” and says “any average candidate should be in the position to provide good answers.” Its actual result: “the most poorly answered” question on the paper, with a pass rate under 10%. This post walks through exactly what went wrong, using the real scenario, the real numbers, and the real marking scheme.
What the Report Actually Said
Question Three tested employment income (part a) and gains on disposal of investment assets (part b), 20 marks combined. The examiner’s verdict, verbatim: “Question Three tested candidates’ understanding on Taxation of Individuals and specifically on employment income and profit or loss on disposal of capital assets. The details given to the candidates were very clear and any average candidates should be in the position to provide good answers to the questions. It turned out that this question was the most poorly answered. Less than 10% of the candidates passed this question. The second part of the question dealt with acquisition and disposal of investment in shares. This is a popular area for candidates. Most of the candidates did not know that the rate for profit on disposal of asset has increased from 15% to 25%.” And in the report’s closing conclusion: “Candidates should pay attention to details when reading. It seems candidates do not read carefully in between the lines when reading. This was clearly demonstrated in the examination, particularly Question 3 where the allowances were monthly, and candidates did not multiply by 12.”
The Governing Principle
Two independent, ordinary failures, in two different parts of the same question. First: Selassi Afolabi’s Risk Allowance (GH¢2,000), Inconvenience Allowance (GH¢1,500), and Professional Allowance (GH¢2,500) were each stated “a month” in the real scenario. The real marking scheme annualises every one of them — GH¢24,000, GH¢18,000, and GH¢30,000 respectively — before they enter the computation, contributing to a final chargeable income of GH¢180,282. A candidate who used the monthly figures as given understated three separate lines of the computation before touching a single other figure.
Second: Adwoa Ntowbea’s share disposal — 500 shares bought at GH¢11, 1,500 more at GH¢12, 800 more at GH¢10, then 500 sold at GH¢12 a year later — produces a pooled cost of GH¢31,500 across all 2,800 shares, an apportioned cost of GH¢5,625 for the 500 shares sold, and a gain of GH¢375. Tax on that gain is 25%, per the current rate — GH¢93.75. A candidate who still had the old 15% rate in memory would compute GH¢56.25, a figure that doesn’t match the marking scheme regardless of how correct every earlier step was.
Where the Marks Are Lost
Missing the ×12 on all three allowances understates the computation by roughly GH¢58,800 in combined annual allowance value before a single other adjustment is applied — and because benefits in kind in the real computation are calculated as a percentage of total cash emoluments, the error compounds downward through every subsequent line, all the way to the final GH¢180,282 chargeable income figure.
Applying the wrong capital gains rate doesn’t damage the method marks for reaching a correct gain of GH¢375 — but it loses every mark attached to the final tax-payable figure, because GH¢56.25 is simply not what the marking scheme rewards. Two ordinary, well-known rules, each undermined not by a lack of knowledge but by a lack of verification — that is exactly why the examiner called the details “very clear” in the same breath as reporting the worst pass rate on the paper.
Exam Tip: Before you write a single figure on any income question, read the scenario once purely to circle every time-period qualifier — “a month,” “a week,” “per annum.” Then build every figure to match the period the computation actually needs. Separately, never apply a tax rate from memory without a five-second gut-check: has this rate changed since I last confirmed it? Both habits cost seconds. Both would have turned this into one of the best-answered questions on the paper instead of the worst.
Conclusion
A question the examiner called clear, on content every candidate already knew, still produced the worst pass rate on the whole paper — because of a word read too quickly and a rate never re-checked. Build the two habits above and questions like this stop being the ones you lose marks on.
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