Construction Pioneers (CP), a construction firm in Accra, is in trouble over non-fulfilment of its tax obligations to the state and has as a result, been prevailed upon to pay a total of DM89, 376,957.82, representing unsubstantiated and misapplied amounts.
According to a special audit of the company (interim findings) which was submitted to the Minister of Finance through the Auditor General, the review of CP’s financial statements from 1999 to 2001 revealed that not all the monies transferred to Liechtenstein had reflected as income to the company. A huge sum of money which accrued to it (CP) as income over the period was not disclosed.
The Audit Report stated, “There was an understatement of income of about 23.7bn cedis and 63.9bn cedis in the financial statements of 1999 and 2000 respectively.”
The effect of this understatement by CP, the report had indicated, was that “tax liability might have been understated. The government may have lost a total of about ?28.47bn in tax revenue on the undisclosed income; assuming a corporate tax rate of 32.5 per cent.”
It stated further that the total amount on the off-loading agreement (of 10 March 1999) was DM78, 880, 972.36, out of which DM30.8m was the standstill cost. “The standstill cost is currently being subjected to forensic audit. The remainder that is DM44, 088, 972.36, is a subject of dispute”, the findings pointed out.
The team of auditors recommended that the Internal Revenue Service (IRS) should be asked to make a demand notice on CP forth for all taxes the company had evaded due to the apparent understatement of it income per the financial statements for the years 1999 and 2000.
