How Indian Company in Ghana evaded Tax worth GH¢1.5m

…But Left Off The Hook by Presidential Taskforce and the GRA

The Ghana Revenue Authority (GRA) is under obligation to collect all taxes and revenues from companies and individuals on behalf of the government for the development of the country, but why the revenue collecting agency, together with the Special Operation Unit (taskforce) set up by the previous government and operated directly from the Flagstaff House, failed to collect duty and penalty amounting to GH¢1,596,757.80 from SOCOMEX, an Indian company, remains a puzzle that is begging for a solution.

As a result of the GRA and SOU’s failure to ensure that taxes due the government were collected, Socomex has not only undermined our tax laws, but has actually changed its name into Shalina Healthcare, and still operating in Ghana.

Investigations by The Chronicle revealed that on October 9, 2015, the then Deputy Chief of Staff, Johnny Osei Kofi, wrote a letter with reference number SOU.2015 .10.09/DTU to the Commissioner General of GRA, drawing his attention to the suspicious operations of Socomex Pharmacy.

Socomex, which was operating in the Free Zone enclave, was under obligation to export 70% of   the pharmaceutical products it was manufacturing, but for some strange reasons, the Indian company was surreptitiously selling the chunk of its products on the local Ghanaian market. Johnny Osei Kofi’s letter read: “The Special Operation Unit of the office of the President is investigating a case of alleged evasion of custom duties involving Somomex Pharmacy Limited and Socomex Ghana Limited.

“We will be grateful if the Managing Directors of the two companies can report to the office of the SOU on 2nd Floor, Room 208 of the Ghana Investment Promotion Centre (GIPC) in the Public Services Commission building near the Ministry of Finance on Monday 19th October, 2015, at 11am prompt.  They are to bring along with them, the underlisted documents for the period 1st April 2011 to 31st March 2015:

“All imports and clearing documents (bill of entry, supplies, invoice, packaging list FCVR, IDFs, etc.), All export documents, Audited Financial statements, sales records-export and local, reliable stocks records, statutory free zones returns, trial balance, ledgers, schedules to the accounts, banks statements – both local and foreign, Monthly PYE returns, VAT returns and local purchases.”

A little over a month later, precisely November 17, 2015, Mr. Micheal Nunoo, Chairman of the SOU, also sent a memorandum with reference number, SOU.2015.11.16/GRA, to the Commissioner General of the GRA. The presidential taskforce memorandum read: “It is my pleasure to write to inform you that after several days of surveillance on the above company (SOCOMEX), a combined team of SOU operatives and customs officers intercepted and arrested a vehicle loaded with pharmaceutical products on 28th September, 2015. The vehicle was parked at the Airport Barracks of Customs Division for investigation.

“On 6th October, 2015, Jeentdra Anna Khot, the supply chain Manager of the company, was arrested and questioned. Mr Khot told investigators that the company, per their invoice submitted to customs, was to export 5,126 cartons of assorted pharmaceutical products to Lome, Togo, and that out of this quantity, 1,955 cartons of assorted pharmaceutical products were loaded on two trucks bound for Togo, and the remaining 3,171 were sold in Accra, without duties being paid on them.

“The estimated duty component on the 3,171 cartons of assorted products sold on the local market was GH¢399,189.45. In accordance with customs Act 2015, a penalty of 300% is recommended, which is equivalent to GH¢1,197, 568.35. Thus, the duty owed plus 300% amounts to GH¢1,595,757.80. By a copy of this letter, the domestic tax unit of the SOU is to move in and audit the company. Thanking you in advance for your support and cooperation.”

The Chronicle established that despite the admission in the above letter that Somex had indeed evaded tax, both the presidential taskforce (SOU) and GRA did not make any efforts to collect the money owed the state, as they sat down for the company to change its name, and is now operating the business under a different name.  The Chronicle’s source close to the deal was emphatic when contacted that the duty and the penalty were never paid, and that the company was now operating under a different name.

Mr. Johnny Osei Kofi, former Deputy Chief of Staff, admitted, when contacted on phone, that he authored the letter to the GRA Commissioner General. He explained that from time to time, they did receive such complaints from Ghanaians, and that what he did was to write to the GRA to draw its attention to the allegation, for them to investigate it, because they were the experts.  He could, however, not tell the conclusion about the case, and whether the fines and duties imposed on the company were paid or not.

When contacted, the Head of Public Affairs of the GRA, Mr. Robert Mensah, requested The Chronicle to furnish his outfit with the letter SOU Chairman wrote to the Commissioner General, which the paper obliged and sent a copy via ‘whattsup’ to him. After two weeks, he sent this ‘whattsup’ message to this reporter: “I have traced the letter… this was given to GRA taskforce to investigate …they contacted Mr. Michael Nunoo, Chairman of the SOU.

“He referred the team to his official, Mr. Mohammed, who said the goods have been sold out. On revert to Mr. Nunoo on the way forward, the GRA taskforce team was told Mr. Nunoo was no more in the SOU. The taskforce could not thereafter continue with investigations.”

Though Mr. Nunoo’s letter to the Commissioner General was emphatic that Socomex had evaded tax, and that the company must pay the amount it failed to pay to the government, plus a 300% penalty, the GRA appears to be saying a different thing.

The Chronicle’s deep throat sources are, however, insisting that Socomex was left off the hook, and that no amount was officially paid to the GRA to cover the tax evaded and a receipt issued to cover the payment.

The company’s Socomex representative, Prashant Guarr, would neither confirm nor deny the evasion of tax allegation, insisting that Socomex was no more in existence. He would also not respond to the accusation that the company had changed its name from Socomex to Shalina Healthcare, when he was contacted on phone.

Keep reading The Chronicle for more information on what went on behind the scenes.

Source: Emmanuel Akli || The Chronicle

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