The General Secretary
of the Professional and Managerial Staff Union (PMSU), Nana Oppong Owusu, has
lashed out at the government for closing down Ghana Manganese Company (GMC)
over alleged tax evasion.
According to him, the government could have sat down with management of the
mining company to resolve the issue at stake, instead of ordering the closure
of the mine, which employs 1,500 workers.
Addressing a staff durbar at Nsuta and a follow up interview with The
Chronicle, Nana Oppong Owusu said the audit report, which the Minister for Land
and Natural Resources, Asumah Cheremeh, based his decision to close the mine
on, was one sided and that the input of the GMC was not sought, let alone,
making the report available for them to respond to.
At a news conference in Accra to announce the closure of the mine, Cheremeh
said the country had lost “$79 million in corporate taxes and $12.8 million in
royalties due and $6.1 million in dividends. Additionally, revenue offshore for
the period 2010 also amounted to $259 million. The estimated losses were based
on a fair pricing model, utilising best business practices, open data, as well
as information obtained from verifiable business intelligence centers.”
According to Nana Oppong, though management of GMC had complied with the order
by sending the entire workforce home, it does not mean they are guilty of the
accusation leveled against them, saying the government even owed them $20
million in Valued Added Tax (VAT) returns. Meanwhile, management of GMC has
responded to the Minister’s order for the closure of the company over the
alleged tax evasion.
Below is the unedited GMC press statement
This press release has been necessitated by the press conference held by the
Minister of Lands and Natural Resources on the 5th of August 2019, on a
supposedly preliminary audit report on Ghana Manganese Company. We wish to
state that our inputs were not sought on the findings of this report before the
sector Minister went to the press. As we are not privy to the detailed audit findings,
we will not be in a position to discredit or uphold the information which was
put out there by the Minister. What we intend to do by this statement is to
also put in the public domain the information we have in our possession.
Yes, indeed, early this year, the Ministry of Lands and Natural Resources asked
a company by name ISC Securities to audit the financial and operational affairs
of GMC. ISC Securities, as we were made aware, is an Israeli company. Two
gentlemen, who were both South African nationals working for ISC Securities,
visited our Nsuta Mine for a day to interview some of the senior management,
and also requested for information. After they had left the mine, they
continued to ask for information which was provided.
We have to put on record that the background and track record of this company
and the two gentlemen were not known to us, but we know that tax, unlike other
disciplines, is more jurisdictional, and Ghana, as a country, has its own tax
laws and system. Act 896, which is the act governing tax administration in
Ghana, clearly states in section 139 that the Commissioner-General of GRA is
the sole administrator of tax in this country, and we, as a company, over the
years has been compliant with all tax audits conducted by GRA. In December
2018, the GRA did a transfer pricing audit on GMC for the period 2013 to 2018
to ascertain loss of revenue to the government.
The report stated that between January 2013 and
June 2017, the price at which the ore was sold was at arm’s length, and,
therefore, no revenue was lost to the government. GRA, however, adjusted the
ore price between the G.M.C. period of July 2017 to December 2018, which
resulted in additional tax (corporation tax and royalties) of US$14,063,202.77.
This amount has since been paid to the government. As a matter of fact, the
price the ore is sold is now determined by GRA, and we, as a company, has
little or no say in the fixing of this price.
The figures put out there by the Minister in his
press conference are, therefore, inconsistent with that of GRA, which is the
mandated institution when it comes to tax issues in this country. GMC takes its
tax obligation seriously, and last year, we won the prestigious GRA Bronze
Award for tax compliance. In 2018, the corporation tax liability of the company
was US$ 31 million, which was settled before 31st December 2018, as required by
the law.
In relation to royalties, the company paid an
amount of US$ 17 million in 2018. As at the time of this press release, all our
tax obligations were up to date with the GRA. As a matter of fact, we are still
waiting for an amount of $20 million in VAT refunds due to us from GRA, between
the periods of December 2018 and June 2019. The records are there for everyone
to check at GRA. The volumes we have shipped through the ports are also
available with GPHA, and we are not in a position to alter these figures to the
disadvantage of the government. The Minister also made mention of our
indebtedness to other our suppliers.
This we found very unfortunate, as this is a
purely commercial matter between two legal entities. As good corporate
citizens, we have continually engaged these vendors when we are unable to meet
our side of the agreement, especially paying them on the due dates. We know the
fear and panic this press conference have caused among our various
stakeholders. We wish to assure our stakeholders, especially the over 1,500
employees whose livelihood depend on this company, to be rest assured that the
company is resolute and law-abiding. We will cooperate with the mandated
government institutions to bring this issue to an amicable end.
The chronicle
