Government "cover up" on Vodafone?

Accra, Aug. 21 GNA - The Committee for Joint Action (CJA) on Thursday criticized the government for deliberately concealing crucial aspects of the Ghana Telecom (GT)-Vodafone Sale Purchase Agreement (SPA) from Parliament and the nation in the effort to deceive and manipulate the people.

The group said documents from the Ghana Investment Promotion Centre (GIPC) confirmed that Vodafone, aware of the extraordinary zeal of the government to sell GT at any price, made outrageous demands for concessions and relieves much to the disadvantage of the people of Ghana.

Mr. Samuel Okudzeto Ablakwa, a member of the CJA, speaking at a press conference in Accra, assured the government and Vodafone that the group would continue to fight against the blatant betrayal of the interest of the people of Ghana until the agreement was reversed. "This is because we believe that Ghana gains nothing from this dubious transaction."

He said a letter dated July 9, 2008 to the Chief Executive of the GIPC by Vodafone applied for various relieves from government. They included exemption from import duties on capital items for three years, exemption from withholding tax on interest payments and exemption from corporate tax in the first three years.

The rest of the relieves include approval for Vodafone to carry forward any losses and offset them against any profits due to the government of Ghana, higher immigrant quota and non-payment of Capital duty on the sale of GT landed properties by Vodafone.

Mr. Ablakwa said strangely the government failed to provide Parliament with details of these unreasonable relieves. He explained that the exemption of Vodafone from paying corporate tax in the first three financial years of their investment represented a loss of revenue to the government of Ghana at a rate of 25 per cent of GT's net profit.

Mr. Ablakwa said even though in recent years there had been other changes in the ownership of other telephone network operators they were not granted this tax holiday.

He questioned why Vodafone who had been allowed to carry forward any future losses against the profits of GT be given extra incentives by exempting them from paying corporate tax from the meagre profits that GT might make.

Mr Ablakwa also stated that under the Act that set up the GIPC a foreign company was entitled to a maximum of four persons to work as their expatriate employees in Ghana, but Vodafone alone had been granted excessive quotas.

He said for the first six months Vodafone could have a quota of 32 foreign staff, 23 foreign employees for up to three years and 17 foreign staff after three years. He said the implication of this was that the new GT would have an over-bloated number of foreign staff that would receive salaries and other benefits that would eventually eat into the potential profit of GT.

He further stated that the SPA did not contain any provision for the training of Ghanaian staff to give them the capacity and equal opportunity to be employed in very top management positions within the company. Parliament last week gave the nod to the agreement to sell 70 per cent of GT shares to Vodafone for US 900 dollars. 21 Aug. 08