Franklin Cudjoe, President of IMANI Africa, has expressed puzzlement over the widespread surprise among Ghanaians regarding the controversial and overpriced GRA-SML deal.
He pointed out that SML was overcompensated for minimal work, with the exception of installing Automatic Tank Gauges, which raises questions about the value received for the payment.
Furthermore, Franklin Cudjoe pointed out that the Ghana Revenue Authority (GRA) incurs an annual expenditure of $125 million to generate a mere $7.5 billion in domestic revenue, highlighting a significant disparity between the costs and yields of the tax collection efforts.
As such, he highlighted that the GRA loss margin stands at approximately 1.6%, underscoring the authority’s struggles to effectively contain and reduce revenue losses, despite its significant annual expenditure.
“Not long ago, in 2018, when it came to communications tax, it planned to spend $30 million (interconnect inclusive) every year to ‘protect’ $74 million (a loss margin >40%)”.
Franklin Cudjoe
Accordingly, Franklin Cudjoe argued that if every citizen were to spend at the same rate as GRA to “assure” tax collection, the authority would require a staggering $3 billion solely for “assurance” purposes, highlighting the unsustainable nature of such an approach.
Furthermore, Franklin Cudjoe revealed that the state has been paying a staggering $1.5 million monthly since 2018, without any apparent benefits, to a secretive entity handpicked by the Minister of Communication, under a controversial contract that guarantees revenue assurance from telecom companies (Telcos).
He explained that the government and the Ministry of Communication had defended this expenditure by alleging that telcos were concealing or misappropriating revenue owed to the state, thereby, justifying the need for revenue assurance measures.
Franklin Cudjoe, however, revealed that despite the agreement being in place since 2018, he had not come across a single report from the entity, raising questions about the transparency and accountability of the revenue assurance contract.
“I am sure another SML-like deal is in the works”, Franklin Cudjoe stated.
Cudjoe Warns Of Potential Presidential Distraction Tactics
Moreover, Franklin Cudjoe warned the public to remain vigilant, suggesting that the Presidency’s belated release of the full KPMG report may be a tactical move to appease Ghanaians and garner praise, potentially aimed at distracting from another looming scandal similar to the SML deal.
Accordingly, he emphasized that the Presidency should not be commended for simply releasing a report that was funded by taxpayers’ money, as Ghanaians have an inherent right to access the KPMG report, and it’s merely a matter of accountability and transparency.
“Our cousins at ACEP say, the Automatic Tank Gauging system was not installed until August last year. Only 6, out of 26, have been done so far. Essentially we paid GHS1.4 billion for nothing.”.
Franklin Cudjoe
Furthermore, Franklin Cudjoe lamented that the government’s priorities are misplaced, spending GHC 1.4 billion on work not done by SML, while hospitals are in dire need of critical medical equipment like dialysis machines and incubators.
He noted these pieces of medical of equipment are essential for saving the lives of citizens who pay taxes to support the government’s activities; “Vampire state”, he added
Meanwhile, following its audit, KPMG called for a detailed assessment of the services provided by SML to GRA, to determine their usefulness and justify the transaction, which has been a subject of controversy.
As such, KPMG’s report highlighted the urgent need to either modify or reevaluate the services provided by SML, as the integration of the Integrated Customs Management System (ICUMS) may result in duplication of external price databases and research services, necessitating a reassessment to avoid inefficiencies and potential waste.
KPMG also indicated that conducting a needs assessment in procurement ensures alignment with organizational needs, efficient resource allocation, risk mitigation, and stakeholder engagement and accountability.
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