General News of Saturday, 21 December 2013
President John Mahama has given orders for the controversial contract between Subah Infosolutions Limited and Ghana Revenue Authority (GRA) to be suspended and reviewed, but available information indicate the contract is still being carried out.
GRA signed a contract with Subah in 2010, for the latter to do electronic audit of the billing systems of telcos. Subah has not done any electronic audit on any telco so far, but the GRA has paid Subah about Ghc75 million between 2010 and 2012.
When the rot was exposed, the GRA Commissioner-General, George Blankson told journalists he did not sign the contract, but only witnessed it.
President John Mahama has ordered the suspension of the contract and asked the Ministries of Finance and of Justice to review it. Following the President’s orders, the Minister of Finance asked GRA to suspend the contract pending a review.
But on October 28, 2013, the GRA Commissioner-General defied the directive from the President and from his boss the Minister, and issued a threat to telecom operators to either allow Subah to install electronic audit machines on the telcos equipment or face sanctions.
The letter stated that the law enjoins telcos to grant the Ministers of Finance and of Communications ‘physical access to their physical network nodes’ particularly at the equivalent points where their billing systems are connected.
“In this regard, we wish to request that you grant Messers Subah Infosolution, a firm contracted by the Ghana Revenue Authority to monitor Communication Service Tax revenue on its behalf, access to your physical network nodes to connect its monitoring equipment in accordance with the provisions of Act 864,” the letter said.
The letter then reminded the telcos of the legal requirement on them to grant access to the appointee of the Ministers of Finance and of Communication (Subah) or be fined 5% of their annual revenue for failure to grant access within 30 days of receiving the letter, and risk losing their licenses if it persists for more than 90 days.
Since the GRA letter was issued, officials of Subah have been holding separate meetings with all the telcos to iron out modalities on how to install audit equipment.
As of December 20, 2013, a document generated from Subah indicates the company has actually signed “non-disclosure” agreements with almost all the telcos and has actually moved its audit equipment to the site of Glo Ghana Limited.
The document indicate that for Expresso, Tigo and Airtel, both parties have signed the non-disclosure agreement while with MTN and Vodafone, only Subah has signed, but the two top telcos are yet to sign their respective portions.
Sources within the telecom industry have also indicated that since the President gave the directive, the Ministries of Finance and Justice themselves have not taken any concrete steps to investigate the contract and review it.
Meanwhile, information reaching ADOMBUSINESS indicates that Communication Service Tax (CST) is paid at the point of sale and not at the point of use, so once a customer buys a scratch card, he/she pays the CST.
The question therefore still remains as to what exactly Subah would be auditing, if indeed the tax has already been paid when the scratch card was sold.
Besides, questions on what the GRA paid Subah Ghc75 million for still remain unanswered. Subah was billed to get 13.5% of whatever incremental revenue they would have discovered to have been hidden by telcos in their audit.
It is now obvious Subah did not do any audit. Moreover, Ghc75 million is 13.5% of Ghc555 million. So did Subah discover that some telcos hid a total of Ghc555 million from GRA, and if so, which telcos were those, and were they prosecuted – did they pay penalties?
Meanwhile, Subah's own statement of account indicate it has been giving loans to some state-owned organisations, even though it is not registered as a financial organisation. And it also emerged from its financial records that it has been giving gifts in hundreds of thousands of Ghana cedis to unidentified persons. In one instance, dates December 20, 2012 it gave over Ghc140,000 as gift to two persons.
It is also instructive to note that some of the top personalities behind Jospong/Subah are former top National Communication Authority officials, Joshua Peprah and Bernard Forson, in their capacities as Consultants of Jospong.
Bernard Forson was former Director-General of NCA and Joshua Peprah was a former Director of Regulatory Administration of the NCA.