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Emmanuel Kofi Nti, Commissioner General of the GRA

Ghana loses GH¢102m to tax evasion.As company involved in tax, duty evasion folds up

BY FRANCISCA EMEFA ENCHILL

CORRUPTION WATCH (CW) investigations have uncovered that the government has virtually lost a whopping GHc102, 997,447.60 in unpaid taxes as Market Direct Limited, the company that failed to pay the amount, has folded up and its assets liquidated by a receiver, PricewaterhouseCoopers (Ghana) Limited.

The tax and duty evader is owned by one Nabil Moukarzel. In the 2017 Auditor General report, which was concluded on December 31, 2017 and submitted to Parliament in June 2018, the Auditor General directed the Commissioner General of Ghana Revenue Authority (GRA), Customs Division to recover the unpaid taxes and duties together with the associated penalties.

The receiver was called in following the inability of Market Direct to defray debts owed many creditors aside the tax evasion. The receiver has, thus, taken charge of liquidating the assets of the company to defray the debts.

The receiver, PricewaterhouseCoopers, now controls the belongings of Market Direct Limited, including the building in which it was operating, vehicles and other assets, most of which have already been sold and others currently up for sale such as a warehouse and two buses to defray huge debts owed a number of banks.

CW can confirm that GRA is aware of the current state of Market Direct and is actively taking action to clear the remaining stock for sale despite declining to speak to CW on the subject.

When CW visited the facility of the collapsed Market Direct Limited, the remaining stock of goods was in the process of being taken out to be sold.

Market Direct Limited was one of two bonded warehouses whose records and stock were captured by the Auditor General in the Annual Report of the Auditor General on the Public Accounts of Ghana- Ministries, Departments and other Agencies (MDAs) for the year ended December 31, 2017.

The Auditor General found that assorted items were taken out of the warehouses without the payment of respective duties and taxes amounting to a total of GH¢103, 876,668.25.

In the case of the second bonded warehouse, Venees Food Products, an amount of GH¢879, 220.65 was lost in unpaid duties and taxes, bringing the total of money lost to the state to GH¢103, 876,668.25.

According to the Auditor General, the weak control in the management of the bonded warehouses by resident customs officers of both Market Direct Ltd and Venees Food Product led to the losses.

The Auditor General, therefore, recommended that the Commissioner General of GRA (Customs Division) recovers the unpaid taxes and duties with consequential orders of penalties and the sanctioning of the resident customs officers to serve as deterrent to others.

Response of GRA

As of October 17, 2018, when CW contacted GRA for an update on the recovery and the sanctions, CW was informed that the GRA was yet to be invited by Parliament to respond to the findings, hence no information could be relayed to the public on the subject.

Meanwhile, CW gathered from sources at GRA that there had been a number of management meetings on the subject after the loss was reported to the GRA by the Auditor General.

Background

Review of records and subsequent stock-taking at Market Direct Limited and Venees Food Products, both bonded houses, disclosed that assorted items were taken out of the warehouses without the payment of duties and taxes amounting to GH¢103,876,668.25

The state lost GH¢102, 997,447.60 in Warehouse Number A/238 called Market Direct Ltd under the supervision of a resident customs officer by name Mrs Charlotte K. Quartey and a loss of GH¢879, 220.65 in warehouse number A/289 called Venees Food Products under the watch of resident customs officer Gladys Nunekpeku.

GRA missing revenue target

Meanwhile, the GRA missed its revenue target for the first eight months of the year as between January 2018 and August 2018, the GRA had fallen short of its target by GH¢1.8 billion.

As a result, it engaged the services of consultancy firm, McKinsey, to help block revenue leakages that persist in its revenue collection.

The Commissioner General of the GRA, Emmanuel Kofi Nti, at an engagement meeting with the media, outlined the performance of the Authority from January to August this year.

According to him, the overall underperformance requires that new strategies be adopted to address the failure to achieve the target. The target was GH¢24.46 billion but GRA had collected GH¢22.66 billion, indicating that the Authority had registered a deficit of GH¢1.8 billion Ced or -7.4%.

As of August 2018, Customs had registered a negative deviation of GH¢1.7 billion, while the Domestic Tax Revenue Division had an overall negative deviation of Gh¢83.8 million or -0.6%.

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