More Shady Deals Revealed At C’ttee Sitting

The pillage of Ghana's scarce resources through fraudulent accounting practices once again became evident at yesterday's sitting of the Public Accounts Committee when members queried officials of the Ministry of Finance and Economic Planning.

Monies running into hundreds of billions of cedis were lost to the state by way of default in the payment of corporate taxes estimated at ¢26 billion,indebtedness of the Security Agencies to the Customs, Excise and Preventive Services (CEPS) totalling ¢78.42 billion, the payment of dud cheques valued at ¢17.20 billion and rescheduling of duties at the cost of ¢2.06 billion.

Other forms of financial malfeasance cited by the Chairman of the PAC, Mr Samuel Sallas Mensah, in the Auditor General's Report for the year 2004/05, were misappropriation of revenue, unpaid taxes into the Consolidated Fund, issuance of dishonoured cheques , under-assessment of final tax and unpaid revenue into the VAT revenue account.

The rest were failure to produce tenancy agreements, non-payment of taxes on rent income , non-payment of national reconstruction levy, uncredited cash lodgements , indebtedness of Tropic Oil Company and the abuse of rescheduled import duty facility.

At the beginning of the meeting the Deputy Minister for the Ministry, Professor George Gyan Baffuor, attempted to state the various interventions instituted by the government to reduce the incidence of waste and misappropriation in the Ministries, Departments and Agencies (MDAs) but the PAC Chairman informed him and the various Commissioners of institutions under the ministry that the committee was more interested in the queries raised in the Auditor General's Report.

Mr Sallas Mensah then raised the issue of the outstanding corporate tax of ¢26 billion which a number of companies owed to the state and had not honoured within the years under review.

He said a review of the files of 32 companies at the Multinational Unit, Kinbu, disclosed that 15 companies defaulted in the payment of their corporate taxes amounting to ¢1.3 billion for the 2002/2003 years of assessment.

The PAC Chairman said similarly, of the 132 company files reviewed at Tema , 71 companies had defaulted in their corporate taxes to the tune of ¢15.5 billion.

“ Also at Kaneshie, our examination revealed that about 90 per cent of the taxpayers did not pay taxes by quarterly instalments as prescribed by Section 80 of the Act 592.

A review of sampled provisional and final assessments raised on taxpayers for 2002/03 years of assessment revealed that ¢5.1 billion had not been paid as at the close of 2003, “ he said.

Mr Sallas Mensah further explained that at Adabraka, ¢2.19 billion of the total provisional assessments raised on 80 companies for the 2002/03 years of assessment was outstanding at the time of reporting whilst at Nima, provisional assessment of ¢ 1.7 billion was yet to be discharged by 50 companies for the 2002/03 years of assessment.

“ In all cases, we did not find evidence that the schedule officers pursued recovery of the outstanding taxes, neither was there evidence that sanctions for non-payment of taxes stipulated under Section 143 of Act 592 were applied by the schedule officers,” he said.

The PAC chairman further asked the Commissioner of CEPS, Mr Emmanuel Doku, to explain why nine seized vehicles allocated to the Ministry of National Security and estimated at ¢236.4 million had not been paid for.

He said it had been the practice of CEPS to demand full payment for seized vehicles allocated to institutions and bodies or persons before such vehicles were released to the allotees.

“We however, noted from the records maintained at the Kotoka International Airport that nine vehicles, valued at ¢236.4 million, allocated to the National Security Council in June 2003 with the promise to pay later, had not been paid for at the time of the audit in December 2005,” he said.

In his response, Mr Doku said even though the service had sent several reminders to the ministry, no reply had been forthcoming.

An official of the ministry disputed the figure in the report, stressing that to the best of their knowledge, the ministry owed CEPS only ¢140 million and not the figure quoted in the report.

Story by Kweku Tsen & Kofi Yeboah