African Automobile Evades Taxes

IT HAS emerged that supplier of the rotten gallopers to Ghana government, African Automobile Limited (AAL), has evaded taxes in Ghana for many years, although the company received huge sums of money as payment from the state.

The Public Accounts Committee (PAC) of Parliament yesterday directed the Ghana Revenue Authority (GRA) to compute taxes on the GH¢8 million judgment debt paid to AAL and come out with what the company ought to have paid as tax.

Giving the directive, PAC Chairman Albert Kan-Dapaah noted that even though the amount was paid to the company in 2010, the tax component of it was not calculated for the company to pay.

He lamented that in spite of the fact that AAL was engaged in thriving businesses such as selling cars and servicing vehicles of a number of institutions belonging to the state, it continued to file negative tax returns in order to evade taxes.

Kan-Dapaah observed that the actual amount that government should have paid AAL was GH¢145,652.32 and not GH¢8 million, since AAL was charging interest on unsettled bills of only GH¢77,000.

Considering the 2010 audited report of the Auditor-General on the public accounts of Ghana which captured the GH¢8million paid to AAL, Kan-Dapaah charged GRA to go further and ascertain the extent to which the company owed taxes.

It was revealed that the money was paid to AAL based on invoices the company presented, without the corresponding invoices from about 17 state institutions that received supplies and services from the company.

Ben Korli, a representative of Intellisys Chartered Accountants, an independent referee that calculated the interest on a principal amount of GH¢145,652.32 owed AAL by the government on vehicles and services provided, told PAC it was rather unfortunate that the state institutions failed to provide inputs for the calculation of the interest as directed by court.

According to him, he had to rely on inputs provided by the AAL management to calculate the interest on the GH¢145,652.32, which shot dramatically to a huge sum of GH¢8million.

He however agreed with members of the committee that the calculation could be misleading.

Mr. Korli also conceded that there were serious limitations on the calculations since the job cards provided by the company to compute the interest could not actually reflect the services provided to the 17 ministries, departments and agencies (MDAs).

The PAC Chairman registered his dissatisfaction about the work done by Intellisys with regard to relying only on documents provided by AAL to arrive at its calculated interest of GH¢8 million on the principal amount.

He therefore ordered that the statement of accounts of the company for 2010/11 be referred to an independent body, the Ghana Institute of Chartered Accountants (ICA), for its comments in order to clarify all grey areas.

Francis Sapatey, Assistant Commissioner of the GRA, assured the committee that it would not take more than a week for the GRA to come out with the correct tax position for AAL, in order to serve the company with a demand notice.