The Ghana Revenue Authority (GRA) has asked President Nana Akufo-Addo to allow the revenue assurance system Strategic Mobilisation Limited (SML) Ghana has installed at the various petroleum depots to continue running. This follows a presidential directive for the contract to be suspended with audit firm, KPMG appointed to review it.
The GRA says dismantling the SML system will lead to severe revenue losses.
“We can confirm that the suspension to all intents and purposes will lead to revenue losses following the suspension. There has been a huge gap in the control system and also the update of the oil marketing companies’ accounts,” a letter, signed by the Commissioner-General, Rev. Dr Ammishaddai Owusu-Amoah and addressed to the president, said.
This concern by the GRA is in sharp contrast to its admission to The Fourth Estate that SML’s data is not used for tax purposes.
“SML has expressed concerns about operation ramifications and disruptions that would arise from the intended suspension of operations,” the GRA letter said.
The GRA, however, said while the SML system will continue to be in operation, it will not make any payment for the services SML will render to the state while the contract remains suspended.
“The system will continue to record data real time until your further directive after the conclusion of the investigation.
“We, however, want to assure you that the contract remains suspended and no payment would be made on the contract until your directive,” the GRA said.
SML is confident that the KPMG audit would clear it of any wrongdoing and clear all doubts surrounding its operations.
KPMG was supposed to have presented its investigative report on the SML/GRA contract last week. But sources have told the The Fourth Estate that the firm has requested for more time to enable it conclude its review.
Reacting to the GRA’s insistence on keeping the SML system, Vice President of Imani Africa, Bright Simons, said it is a clear indication that there has not been any suspension of SML activities and no audit by KPMG.
“This latest development strongly reinforces our concerns and misgivings. It is clear that SML has such an outsized influence that they are dictating to both the GRA and the Presidency as to how the process should be conducted,” Mr Simons said in a statement to The Fourth Estate.
“It is clear that over the two-week period they did not suspend execution of the contract as directed. And it is clear that the highest office of the land has been disabled from directing policy in this matter. Three weeks after a supposed order from the Presidency as to how things should be done, nothing has been done. No audit report. No suspension. No remedial actions,” he said.
Mr Simons said the issue is further sullying the legacy of the president and could also have a negative impact on the reputation of KPMG.
“We do not want to suggest that this is a lame duck presidency, but the President really needs to reflect on the situation and consider the effect on [Nana Akufo-Addo’s] legacy, which is under assault on all fronts. KPMG should also reflect and recognise the reputational consequences of its involvement,” Mr Simons said.
Meanwhile, the Office of the Special Prosecutor last week announced its preliminary investigations into the revenue assurance contract between the GRA and SML.
Background
The Fourth Estate’s investigative report in December 2023 revealed that SML Ghana won the sole-sourced contract though it had no prior experience in revenue assurance. It also revealed that the company had no evidence to back its claim that it had saved the nation from potential revenue losses amounting to GHS3 billion cedis.
The Managing Director of SML, Christian Tetteh Sottie, claimed he did not know about the GHS3 billion figure when The Fourth Estate confronted him with evidence. He said the media, including the state-owned Daily Graphic, had taken a presentation SML made to the GRA board out of context and reported the wrong information. The same information, however, was published on the company’s website.
Mr Sottie left his job as the Technical Advisor to the GRA Commissioner-General in the same year to manage SML Ghana in 2020 when the company started implementing its contract with the GRA.
The Fourth Estate investigations also detailed the circumstances surrounding the signing of an expanded consolidated contract worth nearly USD100 million a year for revenue assurance in the upstream petroleum and gold mining sectors.
The investigations showed that in 2019 when the GRA agreed with SML Ghana, Mr Sottie was the Technical Advisor to the Commissioner-General of the GRA.
The GRA has been the only customer of SML Ghana since its establishment.
Meanwhile, state agencies that are tasked to regulate the activities in the petroleum and mining sectors have denied knowledge of the contract which the Minister of Finance, Ken Ofori-Atta, ordered the GRA to sign with SML Ghana.
