3 Construction company officials in trouble over VAT

Business News of Friday, 6 February 2015

Source: Graphic Online

Vat Demo

Three officials of some construction companies have been arrested for failing to issue tax invoices, causing the state to lose millions of Ghana cedis.

Although the companies, which deal in building materials, charge the taxes on the goods sold, they are said to have failed to issue the invoices to customers.

The invoices are used as a means of repaying the taxes to the state.

The three outlet managers are Hebert Totimeh of the Dawhenya branch of K. Ofori Company Limited; Kwesi Agyeman of Nana K. Gyasi Company Limited, Pokuase branch, and Samila Opoku of the Awoshie branch of Eno Fransor Company Limited, all in Accra.

They were apprehended in a special exercise known as the ‘Mystery customer’ or ‘Test purchases operation’, an exercise used to enforce compliance with tax laws.

They have since been handed over to the Criminal Investigations Department (CID) of the Ghana Police Service.

In unannounced visits, officials of the Debt Management and Compliance Enforcement Unit of the Ghana Revenue Authority (GRA), with support from the police, questioned the shop managers and retrieved all their receipts and invoice booklets.

While some of the companies co-operated with the task force, others refused to allow the task force to carry out the operation smoothly.

Officials of the GRA will be attached to the companies for a month to find out the volumes of trade and ensure that the tax invoices are issued.

Briefing journalists before the exercise, the Head of the Debt Management and Compliance Enforcement Unit of the GRA, Assistant Commissioner Dr Dela Heloo, said it was an offence to not issue Value Added Tax (VAT) and National Health Insurance Levy (NHIL) invoices which were the prescribed GRA Commissioner’s invoices for business transactions.

He said the operation followed complaints from some individuals who had engaged in business transactions with the companies but had not been issued with tax invoices, although they had been charged.

“When we receive such complaints, we send officials who pose as customers to transact business with the companies, and surprisingly, they did not issue our officials with tax invoices,” he said.

Dr Heloo urged the public to insist on tax invoices in compliance with the law.

However, he explained that there were special cases where some taxpayers who had applied for special dispensation were exempted from issuing tax invoices directly.

Some companies, such as shopping centres, because of the volumes of items sold, cannot issue invoices for each transaction. The invoices are, therefore, incorporated in the company’s invoice.

Dr Heloo said a series of operations were to be rolled out, and even though he would not give details, he said they would soon take place in two regions.