MoF failed to deduct GH¢1.7m tax on payment made to Smart Infraco Ltd. – A-G report

Ken Ofori Atta New1 Finance Minister, Ken Ofori-Atta

Tue, 24 Jan 2023 Source: classfmonline.com

The Ministry of Finance (MoF), after paying Smart Infraco Limited, the company contracted to provide Smart Workplace platforms for the Municipal and District Assemblies (MDAs) in the country, did not deduct withholding tax on the payment made to the company.

This was contained in the report on the audit on government’s COVID-19 expenditure for the period of March 2020 to June 2022.

According to the report, a total of GH¢543,058,709.13 was recorded on the Ghana Integrated Financial Management Information System (GIFMIS) by the Ministry of Finance, out of which payment vouchers were paid.

“A total amount of GH¢543,058,709.13 was recorded as expenditure on the GIFMIS and lodged in an account. Out of this account, 194 payment vouchers totalling GH¢543,058,709.13 were processed and paid.

“We recommended that payments to service providers and transfers to MDAs in respect of COVID-19 expenditures should be processed and paid through the GIFMIS,” the report stated.

It disclosed that: “On 6 May 2020, Ministry of Finance paid Smart Infraco Limited GH¢23,388,750 for the provision of Smart Workspace platforms for MDAs to facilitate Virtual Workspace but did not deduct withholding tax of GH¢1,754,156.25 on the payment made to Smart Infraco Limited.”

As part of its recommendations, however, the Auditor-General “recommended that the Ministry of Finance should recover the amount of GH¢1,754,156.25 from the company and pay same to the Commissioner-General of GRA.”

The report noted that the “Ministry of Finance explained that the amount of GH¢23,388,750.00 was part payment to Smart Infraco Limited and, therefore, the total tax on the contract sum would be deducted from subsequent payments to the Smart Infraco Limited.”

The report, however, indicated that: “Failure on the part of the Ministry of Finance to withhold the amount of GHS1,754,156.25 from the payment to Smart Infraco Limited denied the State timely inflow of revenue into the Consolidated Fund as well as the opportunity for GRA to assess the status of compliance of Smart Infraco Limited.”

It, therefore, recommended the recovery of the amount.

Source: classfmonline.com