On the July 2024 Principles of Taxation paper, the ICAG Chief Examiner described one question in four words: “the worst attempted question.” The number behind that sentence is more sobering than the sentence itself — not one candidate scored a pass mark on it. If you’re preparing for a paper that touches VAT, this is the single most useful failure you can study before you sit your own exam, because the topic that broke it is not obscure. It is foundational, and it is fixable in one sitting.
What the Report Actually Said
The examiner wrote plainly: “Candidates have since displayed a lack of grasp of the principles of VAT since the inception of the outgone syllabus (November 2019 to July 2024).” That is not a comment about one unlucky sitting — it is a comment about a syllabus-wide, multi-year gap. The same report noted that “76% showed a great deal of weakness in questions one (1) to four (4),” and that the overall pass rate for the whole paper sat at approximately 30%, only a slight improvement on the 27% recorded the previous sitting. Question Two was the worst of a generally weak paper.
The Governing Principle
The question centred on Fofoto Ltd, a rice distributor with three revenue streams: locally grown rice sold in Ghana, imported rice sold in Ghana, and rice exported to Nigeria. The examiner asked candidates to compute taxable supplies, total supplies, total input tax, deductible input tax, and non-deductible input tax — the full input-tax apportionment chain.
The principle every candidate needed and most did not apply: not every sale a VAT-registered trader makes counts as a “taxable supply” for input-tax-recovery purposes. Fofoto Ltd’s local rice sale sits outside that figure, while the imported rice sold locally and the rice exported to Nigeria both count as taxable supplies — the export included specifically because exports remain taxable supplies even though they are zero-rated in practice. Working from the real marking scheme: taxable supplies came to GH¢4,650,000 (GH¢3,930,000 + GH¢720,000), while total supplies, including the local rice sale, came to GH¢6,000,000.
From there, total input tax for the month was GH¢187,500 — made up of GH¢123,500 VAT on the imported rice itself, plus GH¢25,000, GH¢30,000, and GH¢9,000 of VAT on warehousing rent, electricity, and security services respectively. The VAT on the imported rice is directly attributable to a taxable supply and fully deductible with no apportionment needed. The remaining GH¢64,000, however, serves the whole business — taxable and non-taxable activity alike — and has to be apportioned using the formula: apportioned input tax equals the shared, non-attributable input tax multiplied by the ratio of taxable supplies to total supplies. That gives GH¢64,000 × (GH¢4,650,000 ÷ GH¢6,000,000) = GH¢49,600. Added to the GH¢123,500 that needed no apportionment, deductible input tax totals GH¢173,100, leaving GH¢14,400 as non-deductible input tax (GH¢187,500 − GH¢173,100).
The same question’s second part tested a related but distinct skill: Abomu Ltd had sold GH¢235,000 of goods on credit (VAT-inclusive), later written off as a bad debt, and subsequently recovered GH¢105,000 of it. The correct method first extracts the VAT embedded in the original written-off amount using the rate-over-100-plus-rate formula — 12.5 ÷ 112.5 × GH¢235,000 = GH¢26,111.11 — then apportions that VAT figure against the partial recovery: GH¢26,111.11 × (GH¢105,000 ÷ GH¢235,000) = GH¢11,666.67, declared as output tax in the VAT return for the period the recovery occurred.
The third part asked what reliefs are available to employees and employers under the National Pension Act, 2008 (Act 766). The examiner’s comment was unambiguous: “candidates were not conversant with the requirements under the said law. Candidates were rather writing on tax reliefs in the Income Tax Act, 2015 (Act 896) as amended.” Two separate statutes, two separate relief regimes, answered as though they were one.
Exam Tip: When a question names a specific Act — the National Pension Act, the Income Tax Act, the VAT Act — write your relief points from that Act by name. Blending two relief regimes because they sit near each other in your revision notes is one of the most avoidable ways to lose marks on an otherwise well-prepared answer.
Conclusion
A 0% pass rate on a 20-mark question is not a story about a uniquely hard exam. It is a story about a formula-chain topic — input-tax apportionment — that rewards repeated practice with varied numbers far more than it rewards passive reading, paired with two smaller, entirely avoidable mix-ups: treating exports as non-taxable, and answering a pension-law question with income-tax-law content. Fix those three habits, and this exact failure becomes impossible to repeat.
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