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HomeNewsFinance Ministry failed to deduct GHS1.7m tax on payment made to Smart...

Finance Ministry failed to deduct GHS1.7m tax on payment made to Smart Infraco Ltd – A-G report

The Ministry of Finance, 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 GHS543,058,709.13 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 GHS543,058,709.13 was recorded as expenditure on the GIFMIS and lodged in an account. Out of this account, 194 payment vouchers totalling GHS543,058,709.13 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 GHS23,388,750 for the provision of Smart Workspace platforms for MDAs to facilitate Virtual Workspace but did not deduct withholding tax of GHS1,754,156.25 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 GHS1,754,156.25 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 GHS23,388,750.00 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

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