Local telecommunication giant, Rlg could be bracing for court to rein in MP for Obuasi, Kwaku Kwarteng for spreading untruth about the company.
The MP had accused the company of fraudulently benefitting from tax concession.
‘A survey report dated 12th December 2013 of a survey conducted by the Customs Division of the GRA on the premises of RLG revealed that RLG is an assembling company. In spite of this survey, somehow, RLG has been granted tax concession as a manufacturer. Consequently, for month’s now, RLG has been clearing its already manufactured imports as though it were a Ghana-based manufacturer,’ the MP noted in a statement.
But Rlg has flatly refuted the claims, insisting that the company has never benefited from any tax exemption as manufacturer.
A statement by the Legal & Corporate Affairs Department emphatically said it is ‘untrue that the company obtained tax relief fraudulently from government’.
It said it has referred the issue to its lawyers for advice.
Re: Government has given fraudulent tax relief to Rlg
Our attention has been drawn to statement issued by the NPP MP for Obuasi, Kwaku Kwarteng on the above and wish to explain as follows:
On the 5 th of March, 2013, the company made changes to its business registration documents at the Registrar-General’s Department, especially in relation to its nature of business to include manufacturing of phones, computers, etc and their accessories.
On 9 th October, 2013, we informed the Ministry of Finance and Economic Planning of our desire to obtain exemption from import duties on spare parts used in assembling of mobile phone devices locally.
On 29 th November, 2013, the Ministry responded saying ‘the company does not qualify for exemption under Customs and Excise and Other Taxes Act, 2013, Act 863. However the company can take advantage of the chapter 98 of the customs harmonised code that grants exemptions and concessions to manufacturers who are registered with the Commissioner of Customs and the Ghana Investment Promotion Authority’.
On 20 th February, 2014, the Ghana Investment Promotion Center was informed of the amendments to our business activity.
On 25 th February, 2014, the Ghana Investment Promotion Center responded to us saying ‘we also wish to inform you that the centre has no objection to the inclusion of the following in your company’s objects; manufacturing of phones, computers, etc and their accessories’.
We returned to the Ghana Customs and Excise to continue the process. This included a thorough physical inspection of our production processes at our Plant.
On 18 th March, 2014, the Ghana Customs and Excise granted rlg the Licence to Manufacture Excisable Goods under section 221 (1) of the C. & E.D 1972 (NRCD. 114).
On 31 st March, 2014, the Ghana Revenue Authority wrote to Rlg to withdraw the manufacturer’s licence because a study of the survey report clearly indicates that your company is engaged in the assembly of laptop computers and mobile phones, and that documents submitted state the nature of your business registered by the Registrar-General’s Department..does not include manufacturing.
The letter went on to say that ‘ however, the authority to approve registration of any company involved in purely assembly production process as a manufacturer, lies solely at the highest policy making level and not with any officer at the collection level. You are hereby respectively requested to immediately return the original licence to the undersigned whilst we take steps to continue processing your application to the commissioner of customs division who will escalate it further for eventual policy decision and directive’.
Rlg wrote back to GRA drawing its attention to the effect that the amendments to nature of business had long been done at both the Registrar-General’s Department & the GIPC.
On 23 rd May, 2014, the Ghana Revenue Authority issued a Memo that ‘A four-man committee has been set up to resolve issues relating to the operational definition of manufacturing. Until its work is done, all registered manufacturers should continue to receive benefits under the manufacturers’ license’.
On 5 th June, 2014, the team from Customs toured the installations of Rlg on an assessment mission, submitted reports to the GRA and we are yet to be informed about the outcome.
By the above narration, it is clear that Rlg dutifully, painfully and duly followed the laid-down procedures in its bid to gain import tax exemption as a responsible corporate entity.
It is therefore UNTRUE that the company obtained tax relief fraudulently from government.
The company takes SERIOUS EXCEPTION to allegation by the MP that ‘In 2014 alone, government, according to the supplementary budget, is granting a total of GHc 792 million tax concessions to various organisations and businesses. About 5% of this could be going to RLG alone’. We have referred it to our lawyers for advice.
We are however surprised that as a former Government Spokesperson on Finance and as Member of Parliament, Mr Kwateng was better placed to validate the process of granting the exemption from the statutory state institutions mandated to grant such waivers, especially if the intention was not to attack Rlg and vilify it.
It is important to state that the manufacturers’ licence affords us a reduction in the import duty (from 20% to 5%) and not total exemption. This is to encourage the growth of the economy by making it attractive for companies to manufacture in Ghana crucially with the attendant benefits in employment.
We wish to reiterate that we have no intention and will never do anything to invade taxes either in Ghana or any other country that we operate in.
LEGAL & CORPORATE AFFAIRS DEPARTMENT
22nd July, 2014.
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