Ghana loses GH¢36 billion annually through fraudulent activities of importers

Ghana loses more than GH¢36 billion in revenue as a result of fraudulent activities on the part of some importers, officials of the Ghana Revenue Authority (GRA) and the Special Operations Unit (SOU) at the Presidency have said.

Truckloads of imported goods entering the country through the landed borders without paying taxes/duties have been identified as another source of revenue leakage. 

It is estimated that more than 50 articulated trucks enter Ghana through various entry points weekly without paying taxes.

A memo dated April 10, 2015 from a Deputy Commissioner of the GRA, Mr Anthony Doku, and the Chairman of the SOU, Nii Adote Din Barima I, and copied to the Deputy Chief of Staff, estimated revenue lost to the state annually through smuggling by articulated trucks to be GH¢500 million.

Areas of leakage

According to the memo, falsified invoices and other documents from destination inspection companies (DICs) and the use of wrong custom procedure codes constituted some of the major sources of revenue leakage.

It said there had been a massive evasion of duties on goods imported into the country through the sea ports and the Kotoka International Airport (KIA).

The memo identified goods fraudulently removed from bonded warehouses without the appropriate duties and taxes being paid as another major source of revenue loss to the state.

It put the number of such warehouses at more than 50, adding that they were poorly supervised by customs officers. 

In its recommendations, it called for the Revenue Protection Unit (RPU) of the GRA and the SOU to be adequately resourced.

It said there was also a category of Value Added Tax (VAT) traders who charged and collected VAT on behalf of the state but failed to pay same to the GRA and who never got audited. 

It put that revenue loss at GH¢3,261,423.90.

The memo recommended the immediate release of files on identified companies to be audited and the need to increase the staff strength of the SOU’s tax monitoring team.

Refund beneficiaries

It said taxpayers and exporters who were sometimes fraudulently paid huge refunds and whose operations never got audited constituted a huge source of revenue leakage. 

The team recovered GH¢570,000 from Socomex Ghana Limited under its recovery activities and between 2010 and 2014 more than GHc600 million was paid as refund without an independent audit carried out on it.

It called for the immediate release of files on the identified companies for them to be audited.

About GH¢22.9 million is owed five various GRA offices in Accra by companies which deducted income tax from their employees but failed to account to the state.

According to the memo, given that trend, revenue lost to the state through Pay- As-You-Earn (PAYE) default in 2014 alone stood at GH¢400 million.

It mentioned the Osu, Legon, Adabraka, Tema and Agbogbloshie GRA offices as the five affected institutions.

The various amounts mentioned earlier, together with others that have been lost through similar fraudument activities, are estimated to be more than GH¢36 billion.

Appointment

The memo expressed concern that Mr Humphrey Otu, who had been appointed by the President as Commissioner for the Domestic Tax Revenue Division of the GRA in January this year, had still not taken office.

His appointment, according to the memo, was to fight the serious revenue leakages and the massive corruption in that office.