It has emerged that the Ghana Revenue Authority failed to make deductions of value-added tax (VAT) on payments made to Strategic Mobilisation Limited (SML).
This was contained in the audit report on the contract between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML).
The report noted that SML’s work had contributed to increased revenue in the downstream petroleum sector.
According to the audit findings, SML received a total of GH¢1,061,054,778.00 from 2018 to the present while partially fulfilling its obligations.
SML has disputed receiving GH¢1,061,054,778.00 for its contract with the GRA, arguing that KPMG cited the figure “without reference to the investments made and the taxes paid” during the review period.
The report indicated that on payments to SML, KPMG observed that there was no deduction of value-added tax (VAT) by GRA for an eight-month period on payments.
In determining the value GRA has derived from SML, KPMG assessed the perspectives: quantitative increment in volumes lifted and reported to GRA, incremental tax revenue, and qualitative benefits.
The audit and advisory firm said its analysis on the first determined an incremental volume of 1.7 billion litres for the period May 1, 2020, to December 31, 2023, amounting to 38.6 million litres per month.
On the second, it determined an incremental tax revenue of GH¢2.45 billion for the period under review, which worked out to approximately GH¢55.68 million per month.
The net fee (net of taxes) paid to SML for the same period was GH¢720 million, working out to a monthly average of GH¢16.36 million, which constituted 29.41 percent of the incremental tax revenue.
KPMG added that, on top of the qualitative benefits, KPMG SML conducted 24/7 electronic real-time monitoring of the outflow and partial monitoring of inflows of petroleum products at depots where SML had its flow metres and ATGs installed and operationalized.
“This ensures that the movement of petroleum products outside the depots can be identified and accounted for and also serves as a deterrent for under-declarations,” the KPMG report said.
It has also been established that SML conducted six levels of reconciliation to identify avenues that might cause revenue losses to GRA and share discrepancy reports with GRA to follow up on gaps.
For outflows, SML has installed flowmeters at 24 out of 26 depots, which serve as an alternative source for GRA to be able to determine quantities of petroleum products lifted at these locations, distinct from the volumes recorded by NPA and GRA in ERDMS and ICUMS, respectively.
According to the report, as of December 31, 2023, SML had flowmeter readings for 16 out of 24 depots, representing 76 percent of total petroleum products lifted.
Source: rainbowradioonline.com
