Lesson 12 Communication Tax Issues With Stakeholders

MSAF 606
TAXES & BUSINESS STRATEGY

Lesson 12 – Tax Investigation and Communication
College of Humanities
University of Ghana Business School
Department of Accounting
Session Overview
Lesson Objectives:
▪ By the end of this session you should be able to:
• Understand tax investigation
• Explain tax investigation processes
• Communicate effectively with other stakeholders on
client’s tax matters
Session Outline
▪ The key topics to be covered in this session are as follows:
• Tax Investigation
• Tax Communication
Reading List
▪ Amidu, M. (2019), Principles and Practice of Taxation, First
Edition, Digibooks, Accra. Ghana Chapter 16, (pages 525-
532)
▪ Income Tax ACT, 2015 (ACT 896), Ghana Publishing
Company Limited, (Assembly Press), Accra, Ghana
Topic Two
TAX INVESTIGATION
Tax Investigation/Research
Tax Investigation
▪ Tax investigation/research is the process of solving tax-related
problems by applying the tax law to specific sets of facts.
▪ Tax investigation is aimed at determining the tax implications of
certain set of facts or to answer tax specific questions.
▪ The three types of tax investigation/research are as follows:
• Planning research - This is carried out when not all facts are
known and it is used to advise the client on the effective ways of
planning their taxes.
• Compliance research - This takes place after all facts are known
and is used to obtain the best tax result within the existing tax law.
• Policy research - This is undertaken to understand the reason
behind tax reforms and changes.
Steps in Tax Investigation
▪ According to Karlin (2008), the four basic steps in the tax research
process are as follows:
• Gathering of relevant facts - The research must determine tax questions
and identify all materials, relevant and critical to the facts.
• Researching - The researcher ought to identify and read pertinent
resources, define the question if necessary and/or obtain additional
materials relevant to the facts.
• Analysis to locate the applicable authorities - The researcher needs to
synthesis information gathered in the first two steps and determine the
appropriateness of the information. The tax authority also needs to be
consulted to verify the information gathered.
• Communication and recommendations to the client - The researcher
determines the appropriate form of communication to the client
Method/medium
▪ Research Memo or client Letter may either be used to communicate
with the client.
▪ For internal communication, memo could be used
▪ Communicating to a client, a letter could be used
Topic Two
COMMUNICATION TAX ISSUES

Tax Communication
With Clients and Authorities
▪ Communicating clearly in an appropriate language to a

specialist and non-specialist alike is an important aspect of tax
consultancy.
▪ We begin our discussions with the appointment and acceptance
as there is always the need for timely communication with
clients
▪ Updates on representation to the Tax authorities
▪ Specification of the scope of assignment in the Letter of
Engagement.
Tax Communication
Appointment of Tax Consultant
▪ In the appointment of tax a consultant, the client usually issues to

the consultant, the Letter of Engagement.
▪ The Letter of Engagement should be made on the client’s
letterhead.
▪ The client should specify the scope of the engagement in the Letter.
▪ The consultant must also be guided on accepting any job and
understanding their obligation as tax agents, liaising between the
clients, tax authorities and other third parties.
Tax Communication
Example of the Letter of Engagement
25th February 2019
The Managing Partner

AB & Associates
P.O. Box CT 1804
Cantonments,
Accra
Dear Sir,
APPOINTMENT AS TAX CONSULTANTS
We refer to the discussion held recently with our directors on tax and related matters
and hereby confirm that management has today approved your firm’s appointment as
Tax Consultants to our Company with immediate effect. Please note that the services
to be rendered include employees, directors and company tax matters.
You are to please liaise with our financial controller, who will provide you with all
necessary information and financial statements/records which you might require in
the course of carrying out the assignment. We propose a meeting with you for next
Wednesday March 4, 2019 by 2pm at our Accra Head Quarters to finalize the details.
We look forward to a mutually beneficial relationship between our company and your
organization.
Thank you.
Yours faithfully,
For: Wiseman Limited
(Signed)
(Managing Director)
CC: The Commissioner-General

Ghana Revenue Authority
Accra
Tax Communication
Acceptance of Offer as Tax Consultant
▪ The acceptance of the offer by the tax consultant is an
indication of his/her readiness to render the specific services
requested.
▪ The consultant needs to fully understand the nature and scope
of the engagement.
▪ Issues relating to professional fees should be fully discussed
before the beginning of the contract.
▪ Acceptance to the offer, must be communicated in writing to
each client.
Tax Communication
Example of Letter of Acceptance
March 10, 2019
The Managing Director

Wiseman Limited
24 Dadiban Road
Accra
Dear Sir,
ACCEPTANCE OF OFFER AS TAX CONSULTANTS

Your letter of February 25, 2019 on the above subject matter refers.
We confirm our firm’s acceptance of your offer to act as tax consultants to your
organization.
From the contents of your offer letter, we understand that we shall provide tax related
and advisory services to your company, its directors as well as employees. We will
also only represent your interest with the relevant tax authorities from time to time.
We shall be please to meet with you as scheduled.

Thank you.
Yours faithfully,
(SIGNED)
Managing Partner
For: AB & Associates
Tax Communication
Client’s Documentation and Records
▪ After accepting the offer, the tax consultant should maintain
important documentation and records.
▪ Below are some documentation to be maintained by the tax
consultant with respect to each client:
• Incorporation documents i.e. Certificate of Incorporation,
Certification to Commence Business, directors, shareholders,
secretary and share capital, etc.
• Engagement letters
• Company auditors’ details if different from that of tax
consultant
Tax Communication
Client’s Documentation and Records
▪ Audited financial statements, capital allowances, income tax, and

other computations
▪ Trial balance, detailed analysis and schedules on the financial
statements
▪ Correspondences with the client, tax authorities and third parties
▪ Registration documents in respect of Income Tax and third
parties
▪ Registration documents in respect of Income tax, value added tax
(VAT), PAYE, withholding tax and other levies.
▪ Other documents, financials and non-financials
Tax Communication
With Tax Authorities
▪ Tax authorities rely on documents and information provided
by taxpayers to determine the tax liabilities of the taxpayer.
▪ Additional information may be obtained from third parties
such as bankers, insurers, landlords, tenants, suppliers,
customers, shareholders, etc.
▪ Communication with tax officials will usually cover the
following:
• Filing of tax returns within the time specified by the Tax Law.
• Self-Assessments and raising of objections to an assessment; if
any.
• Tax queries and replies.
Tax Communication
▪ The following details and Incorporation documents (originals Copies),
will be provided by prospective taxpayer to the Commissioner-General
of the Tax Authority:
• Name, registration number and date of incorporation/registration.
• The registered or home address (as applicable).
• The business address.
• Names and address of directors.
• Names and addresses of the shareholders together with their
shareholdings.
• Any other directorship held by the directors.
• The precise nature of business.
• Whether or not the business has any predecessor(s)
Tax Communication
• The date of commencement of business.
• The accounting year end.
• Details of company secretary (where applicable).
• Details of the appointed auditors and tax consultants
Thank you

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MSAF 606

TAXES & BUSINESS STRATEGY

COMMUNICATION TAX ISSUES

▪ Communicating clearly in an appropriate language to a

▪ In the appointment of tax a consultant, the client usually issues to

The Managing Partner

APPOINTMENT AS TAX CONSULTANTS

CC: The Commissioner-General

The Managing Director

ACCEPTANCE OF OFFER AS TAX CONSULTANTS

We shall be please to meet with you as scheduled.

▪ Audited financial statements, capital allowances, income tax, and

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