91 Companies, Clearing Agents to pay GH¢14 billion to state

The Special Operations Unit (SoU) of the Office of the President has issued demand notices to 91 companies and clearing agents to recover about GH¢14 billion owed the state through fraudulent business activities in 2014. The companies have been given a 30-day ultimatum from their date of notice to refund the money, failure of which would result in a penalty of up to 300 per cent, coupled with legal action. A Deputy Commissioner in charge of Operations at the Customs Division of the Ghana Revenue Authority (GRA), Mr Frederick Gavor, in a letter of notice to the companies, said all legal and court related costs in connection with the recovery would be borne by the individual companies. Individuals and companies served with demand notices are required to submit their payment receipts to the Chairman of the SoU, Nii Adote Din Barima I, as evidence of the payment. Fraudulent Activities The fraudulent activities included underpayment of revenue to the state. For instance, instead of paying GH¢45,713 to the state, one importer paid GH¢15,687. Some also engaged the services of multiple destination inspection companies (DICs) and ended up underpaying their permits. Others falsified invoices and other documents from the DICs and used wrong custom procedure codes and that constituted one of the major sources of revenue leakage to the state. Currently, the SoU has in its custody 9,000 companies that have under declared their financial accounts for 2010, 2011 and 2012. Meanwhile, 33,000 companies have filed credits against the state and are now awaiting investigation. Nii Barima I told the Daily Graphic that preliminary investigations by the unit’s monitoring team had established a connection between domestic tax and financial accounts fraud, as well as warehousing fraud filed by companies. He said many other fraudulent activities currently under investigations needed to be concluded to prepare persons for prosecution and added that importers of different types of goods in bonded warehouses since 2009 had not paid duties on them. A recent report in the Daily Graphic revealed that annual revenue lost to the state as a result of fraudulent activities of importers and other companies was estimated at GH¢36 billion. Background President John Mahama in 2014 inaugurated a reconstituted SoU at the Flagstaff House and charged members of the unit to recover revenue lost to the state and also adopt strategies, including the use of technology, to plug the revenue loopholes. The unit recovered GH¢765 million last year and in the previous year, exposed some importers and operators of bonded warehouses that owed the state an estimated US$340 million, out of which GH¢320 million was paid. Challenges The SoU is faced with a number of difficulties in spite of its achievements. Sources within the unit told the Daily Graphic that the domestic tax mobilisation team of the unit was unable to call for files of defaulting companies as a result of the apparent reluctance by some senior staff of the GRA to collaborate with the SoU. The sources added that there were logistic problems such as identity cards, internet connectivity and operational vehicles that were hindering the work of the unit, saying “many outstanding cases have either not been processed at all or the cases have been poorly prepared.”

Source: Daily Graphic