‘CP enjoyed tax exemptions without parliamentary approval’

By Edmund Smith-Asante

Deputy Commissioner, Large Tax Office (LTO),
Mr Kaleo Rogation Adams with GRA lawyer

A construction company, Carl Plotner (CP), which later became Construction Pioneers (CP), did not fulfil any of its tax obligations to the country from 1991 to 2001.

However, the Deputy Commissioner, Large Tax Office (LTO) under the Domestic Tax Division of the Ghana Revenue Authority (GRA), Mr Kaleo Rogation Adams, explained that CP did not pay any tax to the state because the company was exempted from doing so by the government.

Representing the Commissioner of the GRA at the Judgement Debt Commission sitting yesterday, Mr Adams said although the revenue authority continued to pursue the matter, as it realised the exemption had not received parliamentary approval, CP insisted in letters that it had, indeed, been given exemptions on taxes and payment to expatriate staff by the government.

Audit findings

“An audit was conducted in 2001 on the operations of CP. We came out with a liability and notified the company accordingly. Then it said when it was coming to Ghana to carry out projects, the government, in an agreement with CP, granted the company an exemption from paying taxes on its income and taxes on its expatriate staff. 

“And we are of the view that once that agreement with the government hadn’t gone for parliamentary approval, in line with Article 174 of the 1992 Constitution, we did not think that they could enjoy that exemption. So we were still pushing for them to pay the liability and they stuck to their guns that once the government had given them an exemption, it was the business of the government to see to it that the exemption was sought from Parliament,” Mr Adams told the commission.

According to the deputy commissioner, the tax exemptions were specific to projects CP was undertaking.

PAYE tax obligation of CP

The GRA Commissioner was invited by the commission to speak to the Pay As You Earn (PAYE) tax obligation of CP in respect of contracts that it had carried out in Ghana from 1991 till date.

But Mr Adams said in view of the long period of 13 years that had elapsed, the documents had been declared dormant, sent to the archives and could not be traced. 

He could, therefore, not furnish the commission with the list of both local and foreign employees of CP.

Mr Andrews Kingsley Kodzo Kufe from the Controller and Accountant-General’s Department (CAGD) represented the Controller and Accountant-General in the first case in respect of claims that might have been brought up against the department by CP.

He told the commission that no claims had been served on the department “and for that matter, we have nothing to show as evidence of claim on the department in respect of service rendered”. 

When he was made to understand that the claims were in respect of goods supplied for which no payments had been made, Mr Kufe asked for another date to supply the required documents.

Demolition of complex

When he took his turn, the Chief Valuer from the Land Valuation Board, Mr Kwesi Bentsi Enchill, spoke in respect of Mr Henry Osei Danquah, who had sued one Godfred Amoo and others (including the Ministry of Transport and the Attorney-General) in respect of a demolition that was carried out on his complex on a railway reservation in Kumasi.

In the attempt to demolish 18 shops which were part of a shopping complex because they had strayed into the Ghana Railway Company’s reservation, 24 other shops were affected. 

As a result, Mr Danquah was granted a judgment for GH¢452,582.50 for the 18 shops and special damages of GH¢646,625 for negligence awarded for the 24 other shops, totalling GH¢1,418,151.76.

Writer’s email: Edmund.Asante@graphic.com

This story was first published by the Daily Graphic on May 22, 2014