IRS Slaps C100m Tax on Ex-Minister

In a directive that is bound to draw both applause and goose bumps from different people, the Internal Revenue Service (IRS) has directed the Keta MP and ex-Minister of Trade and Industry, Dan Abodakpi to pay the state ?100, being tax on a gift of school fees paid for his daughter?s education abroad. This follows the public admission by the Keta MP that the Iranian-Ghanaian businessman, I. K. Mourkazel paid his daughters fees at East London University in the United Kingdom, where she obtained her first degree between 1996 and 1999, and the A&M University in Texas, USA, where she proceeded to do her post graduate course.

Abodakpi was slapped with the tax following his admission during the trial of his convicted colleague Minister, Victor Selormey on July 12, last year that Mourkazel picked the education bills of his daughter, Rejoice.

Ms Rejoice Abodakpi left the University of Cape Coast in 1996 for the East London University following what her father told the courts, was the disruption of the academic calendar for that year. Gift tax is recognised under Tax laws of the state. Act 592 of the Internal Revenue Act 2000 makes it mandatory for one to pay gift tax on the total value of taxable gifts received within a year of assessment.

Gift tax is charged on buildings of a permanent or temporary nature, land, shares, bonds and other securities and money including foreign currency. Others are business assets, any means of transportation (lands, air, sea), gifts and chattels and part of, or any right interest in, to, or over any of the assets. Under the law, one is expected to pay tax on gifts valued above ?500,000.

Giving evidence on behalf of the defense in the trial of Selormey for conspiring with Mr. Frederick Owes Boadu, a Ghanaian Consultant in the US to fraudulently cause a loss of $1.2 million to the state. Abodakpi said Mourkazel approached him to sponsor Rejoice?s university education in fulfillment of a promise made by Anthony Irani a deceased in-law of Mourkazel.

He said he was never given full details of how much was spent on his daughter. Sources say follow-up enquiries by IRS investigations revealed the total sum paid on behalf of Abodakpi?s daughter. The sources said ever since he was asked to settle his gift tax, the former Minister had been pleading with the IRS Commissioner, Mrs Janet Opoku Acheampong who is personally handling the issue to waive the tax. Mr Abodakpi could not be reached for his comments.

However, a protest letter from him challenged the directive by the IRS to pay the gift tax, saying the payment of the fees took place outside the jurisdiction of Ghana and was given to his daughter and not himself. IRS sources however say that once Abodakpi?s daughter received payment for her education by virtue of the relationship of his father with Mourkazel, he has to pay tax on the gift.