ECG, Customs Deny Complicity In Bonded Warehouses Fraud

Two agencies have refuted allegations that they either evaded the payment of taxes or failed to discharge their statutory obligations to the state. While the Customs Division of the Ghana Revenue Authority (GRA) has requested the Presidential Task Force to provide more information on the bonded warehouses where the alleged evasion of taxes was perpetrated, the Electricity Company of Ghana (ECG) says it is not part of any grand scheme to rob the country of the needed revenue required for national development. Reacting to a report that more than 280 companies had evaded the payment of taxes amounting to $367million over a seven-year period, the Public Relations Officer of the Electricity Company of Ghana (ECG), Mr William Boateng, said the ECG would not engage in the evasion of taxes, which is a statutory national obligation. Among the state institutions cited was the ECG, which was said to owe $877,329. ECG’s background But Mr Boateng said the taskforce was given wrong information by the Customs Division. Giving a background to the issue, he said on September 9, 2007, the company’s materials depot office in Tema got burnt, resulting in the loss of all the documents on its consignments. Following the incident, he said, the ECG wrote to the then Customs, Excise and Preventive Service (CEPS) to inform it of what had happened, supporting its letter with reports from the Ghana National Fire Service and the Ghana Police Service. “We then requested CEPS (now a division of the Ghana Revenue Authority (GRA) to give us documents on the goods that were in our (Riepco) warehouse, and so they provided us with the documents. CEPS used the Ghana Community Network Services Limited (GCNet) and brought us computer information about the consignments,” he said. The ECG PRO said it was based on the documents provided by CEPS that the company used to clear goods from the warehouse. Mr Boateng said it was later in 2011 that the Customs Division provided an audit report, indicating that the ECG had not paid taxes on some four consignments. “CEPS did not send that information to us; it sent the information to the warehouse (which ensures that we pay before we clear our goods). The warehouse then forwarded the report to us because the items there were our consignments. “But we said we cannot pay taxes on audit report because we pay taxes based on documents that have been given to us from the system,” he said. Mr Boateng said the ECG then wrote to the Customs Division asking for documents on the consignments, upon which the Customs Division said the ECG had evaded taxes. The ECG tried to see how to address the problem, if there was any. ECG-GRA discussions He said although the company was in discussions with the Customs Divisions, the documents were not forthcoming, thereby compelling it (ECG) to write again to the division for extension of days on the declarations it said the ECG had not paid taxes on. “When we asked for extension of days, they wrote back to us to pay a penalty of GH˘ 14,000. Then we said we could not pay GH˘ 14,000 because they had not been fair to us,” he said. Following that, Mr Boateng said, the ECG then wrote again in a letter dated April 7, 2013, signed by the Managing Director, Mr William Hutton-Mensah, asking for a penalty waiver. He said so far there had not been a response to the penalty waiver letter, let alone the documents ECG had requested on its alleged indebtedness to the state. Last week, he said, the ECG met the GRA to bring a closure to the matter, and that discussions were still going on. “We seriously expressed our dissatisfaction with the way the Customs Division of the GRA had handled the matter. We think Customs should have explained the issue to the taskforce,” he said. At a press conference to explain its position on the alleged evasion of taxes, the acting Commissioner of GRA, Customs Division, Mr Isaac Apronti, said his outfit recognised the interest by various stakeholders in ensuring that revenue leakages were reduced to the minimum. He said the presidential task force was complementing the work of the Field Audit Team of the GRA which conducted routine and regular review of all aspects of the suspense regimes to ascertain whether goods that were taken into bonded warehouses, free zones, transit and temporary importation of vehicles and goods for exhibition had been accounted for. In June 2013, the Customs Division, upon review of its task management controls, introduced a task force on warehousing to conduct targeted audits of warehouses with rice as the initial focus and so far, 56 warehouses had been examined and various levels of discrepancies had been detected. Out of the 56, only two were found to have some of the goods diverted and those two had been served demand notices for the revenue not collected and penalties imposed on the diverted goods. Mr Apronti indicated that those two had been served demand notices for the revenue not collected and penalties imposed on the diverted goods while in the remaining 54 visited were goods found to have overstayed.