Finance ministry failed to deduct tax on Ghc2.5m Judgment Debt

The Director of External Resource Mobilization at the Ministry of Finance, Kwadwo Awuah Peasah, yesterday told the Judgment Debt Commission that the Ministry did not deduct the withholding taxes on the Ghc2.5 million judgment debt paid to New World Securities.

He said, "upon checking through the payment document I realized that the tax column was blank which means it was not deducted," he noted.

Mr. Peasah said this when he appeared before the Justice Apau-led Sole Commission into Judgment Debts yesterday at the Old Parliament House, in respect of a case involving Ghana National Procurement Agency (GNPA) and New World Securities (NWS), resulting in the payment of judgment debt to the latter.

He said the Ministry did not deduct withholding taxes from the payments made by the State to companies and individuals as judgment debt until 2001, when the internal auditor prompted it.

He indicated to the Commission that an officer in the accounts office of the Ministry told him that the tax was not deducted due to lack of information as to which aspect of the money to deduct the withholding tax from.

Justice Apau in his remarks said: "The explanation the Accounts Officer gave you was not sound," he noted.

He said every business transaction payment should be tax inclusive, especially where the monies involved was a huge sum, adding the GRA has to be subpoenaed again for a clearer explanation.

The Commissioner expressed surprise as to how a country in need of funds for developmental projects will not be proactive in tax deduction.

Briefing the media on the matter, the Lead Counsel for the Commission, Dometi Kofi Sokpor, said GNPA borrowed from NWS to import sugar, but the suppliers failed to deliver the goods.

GNPA, therefore, defaulted in repaying the loan and NWS sued, resulting in the payment of judgment debt to the sum of Ghc2.5 million.

He added that a representative of Ghana Revenue Authority (GRA) had already appeared before the Commission in respect of the same case and clearly stated that the withholding taxes were not deducted.