The Auditor-General has directed the Ministry of Food and Agriculture (MoFA) to surcharge its Chief Director with GH₵612,500.00 for his carelessness in the handling of a €3,500,000.00 deal between the Ministry and Messrs. KNIGHTS A. S. from the Czech Republic which has cost the State huge sums of money.
Ghana was expected to have earned GH₵612,500.00 being Withholding Tax from the supply of 100 Cabrio Compact Tractors and Accessories worth €3,500,000.00 by Czech firm.
But due to negligence on the part of the Chief Director of the Ministry of Food and Agriculture, the State could not realize that amount.
The Ministry of Food and Agriculture had argued that the said transaction, including all contracts for the procurement of the tractors, was executed in the Czech Republic.
Therefore, Messrs. KNIGHTS A. S. was liable to Withholding Tax and any other relevant tax obligation in Ghana.
But the Auditor-General, in his report on the Public Accounts of Ghana (Consolidated Fund) for the year ended December 31, 2014, said a critical review of the Contract Form between Messrs. KNIGHTS A. S. and the Ministry of Food and Agriculture acknowledged the execution of the agreement in accordance with the laws of Ghana.
“The procurement, in my view, was subject to the Ghana Tax Laws and therefore the Withholding Tax provisions were applicable to the purchase of the tractors”, noted the Auditor-General.
That aside, there was no exemption letter from either Parliament or the Ghana Revenue Authority (GRA) to justify why the Ministry failed to apply the tax law.
Although, the Auditor-General attributed the flaws to weak management oversight and the absence of an application control within the Ghana Integrated Financial Management Information System (GIFMIS), he believes that the Chief Director at the Ministry of Food and Agriculture should be surcharged with the GH₵612,500.00 that was loss to the State.
