The Auditor-General has questioned the basis for tax exemption by the Team office at the Freezone, to Red Sea Housing Services (GH) Limited. This is contained in the 2019 audit report.
Exemption was also made on sales of prefabricated housing units to four Companies amounting to ¢889,962.46 by the Ministry of Finance without Parliamentary approval.
Article 174 of the 1992 Constitution requires that no taxation shall be imposed other than by or under the authority of an Act of Parliament. Where an Act, enacted in accordance with clause (1) of Article 174, confers power on any person or authority to waive or vary a tax imposed by that Act, the exercise on the power of waiver or variation, in favour of any person or authority, shall be subject to the prior approval of Parliament by resolution.
But this did not happen in the case of Red Sea Housing.
The 2019 Audit report also identified that the Kotoka International Airport Collection office of the Ghana Revenue Authority also exempted some entities from the payment of duty and tax totaling ¢6,235,338.85 on imported goods without Parliamentary approval.
The entities are Amandi Energy, Authentix Incorporated, Early Power Ltd, Electoral Commission of Ghana, Ghana Health Service, Ministry of Health and Ministry of Local Government.
The Auditor-General cautioned the Ghana Revenue Authority’s Sector Commanders to ensure that Parliamentary approval letters which gave authority for the exemptions amounting to ¢7,125,301.31 are provided for inspection. In the absence of that, the exempted amounts should be recovered from the entities involved.
Meanwhile, the Auditor General has ordered the Ghana Revenue Authority to recover ¢908,570.45 from Fujain Sentuo Ceramic Ghana Ltd as customs Taxes with the required penalty, if approval letters for the exemptions from Customs taxes are not provided by the company.
Section 121 of Customs Act, 2015 (Act 891) requires that where a person is in any way involved in fraudulent evasion or attempted evasion of customs duties or taxes under the provisions of this Act, or any other enactment, that person commits an offence and is liable on summary conviction to a fine of not more than three hundred percent of the duty.
In addition, the person may also face a term of imprisonment of not less than five years and not more than ten years and in addition, all goods in respect of which the offence was committed is liable to forfeiture to the State.
The 2019 Auditor General’s report shows tax exemption records at Fujain Sentuo Ceramic Ltd. amounting to ¢908,570.45 on six Customs declarations in 2016 and 2018.
The Ghana Investment Promotion Centre (GIPC) tax exemption approval letters gave exemption for only Import Duty, VAT and NHIL. The Auditor-General has therefore ordered that the said amount be recovered from the company.