The debate concerning the recent shake up at the Ghana Revenue Authority (GRA) on the re-assignment of the Authority’s three top officials has deepened following revelations of various financial infractions as contained in the latest Auditor General’s report.
While the GRA has been regarded as having done an excellent job, the events leading to the shake up are now being revealed.
According to the report, the conduct of the Authority is liable with regards to various financial infractions captured under the total tax irregularities as well as cash irregularities which amounted to Gh¢4.788 billion (92.15 percent) and Gh¢388.9 million (7.48 percent) respectively.
Out of the total cash irregularity of Gh¢388.9 million, an amount of Gh¢312.2 million, representing 80.27 percent was disbursed by the General Refund Account of the GRA for non-tax refund activities.
These cash irregularities themselves were as a result of unapproved disbursement, unauthorized use of Internally Generated Funds (IGF), dishonoured cheques, unauthorized transfer of funds, misapplication of funds among other factors captured in the report.
The Auditor General Daniel Domelovo recommended that the GRA and Ministry of Finance should avoid making payments which are not tax refunds from the General Refund Account as per Section 57(2) of the Value Added Tax Act, 2013, (Act 870). This infraction, according to the report cuts across the Ministries, Departments and Agencies (MDAs).
With respect to tax irregularities, the report also found GRA guilty of failure to conduct itself properly. Here, a total of 10 Oil Marketing Companies (OMCs) failed to pay excise duties, taxes and levies amounting to about Gh¢34 million on petroleum products lifted at the Tema Oil Refinery (TOR) between November 2016 and November 2017.
Section 32 of the Excise Duty Act 2014, (Act 878) states that, a manufacturer who fails to make a payment required under this Act to the Commissioner-General (of the GRA) by the due date is liable to pay a penalty of 15 percent of the amount due and an interest of 5 percent of the amount due for each day that the failure continues.
However, the report puts the blame on the Authority for its failure to collect the tax revenues due and to apply measures and sanctions against defaulters which literally gave room for a number of OMCs to freely flout regulations requiring them to fulfil their tax obligations.
The 10 OMCs who failed to pay taxes are Ghana Oil Company (GOIL), Tel Energy Ltd, Star Oil, Agapet and Nasona. The rest are Champion Oil, Glee Oil, Hills Oil, So Energy and Radiance Petroleum Ltd.
“The failure to perform reconciliation on the actual petroleum liftings with the declarations and actual payments as well as weak oversight on OMCs with respect to penalties and interest payments, in our view accounted for the anomalies”, the report states.
Similarly, the report noted that 11 OMCs delayed in paying duties on petroleum products lifted for periods ranging between one and nine months which also attracted penalties totaling GH¢783,178. The companies are Nasona Oil Company Ltd, Radiance Petroleum Ltd, Venus Oil Company Ltd, Baffour Gas Company, Mighty Gas, Engen Oil, Glory Oil, Hills Oil, World Gas, Glee Oil and EV Oil.
As a measure to overcome this challenge going forward, the Auditor General has recommended that Management of GRA should strengthen its monitoring and supervision of its staff by taking the needed steps to improve efficiency in tax administration, collection and follow up on overdue taxes while applying sanctions as prescribed by the tax laws.
On the upside, the general public regards the GRA as having done tremendously well regarding domestic revenue tax mobilization. Key among these achievements include online registration of taxpayers, online tax management as well as online tax return filing and payments.
Although the GRA has consistently failed to meet its tax revenue mobilization targets, this is only because the annual targets have been raised over-ambitiously high over those of the preceding year. In absolute terms, GRA has recorded strong revenue growth by the year since 2017.