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Opinions of Thursday, 22 May 2014

Columnist: Adoli, Kofi

The subah saga. Was there really 'work not done'?

Barely a week ago, news broke on Joy FM's Super Morning Show that the Committee set up to investigate the controversies surrounding Subah Info Solution's Contract with the Ghana Revenue Authority (GRA) had exonerated Subah.

But participants on the show, who, in my view, are important opinion formers in Ghana's public space, could not hold back their disappointment and angst. To them, the committee swerved the key question that underpinned the brouhaha; did Subah do any work for which it was paid?

My earlier familiarity with Subah was not a serious one until the post-report discussions resurrected Subah. I have since, keenly followed the discussions and raise some logical questions therefore.

Question one: Was there a Contract Between GRA and Subah? What are the relevant terms? From the discussions, it is undisputable that there exists a contract which says something like this: 'until now we have been receiving 'x' amounts of Ghana Cedis as tax paid to the state by Telecom Companies operating in Ghana. But we are unable to verify their operating data and incomes which form the basis for the taxes they paid to us. To verify such record which are mainly IT-intensive, government needs to invest additional amounts which it is unable to marshal. We therefore need someone (Subah after a procurement process I suppose) to shoulder that investment. If we (government through GRA), AS A RESULT OF THIS CONTRACT being operationalised, receive or realise ADDITIONAL taxes above amounts we previously were receiving, you (Subah) will be paid 13.5% of that ADDITIONAL amount'.

Question two: Did Ghana and Ghanaians Benefit from Subah? In other words, was there any additional tax revenue, post-contract? This question highlights some semblance of non-disclosure on the part of government/GRA/MoFEP as the discussion rages on. That semblance is partly feeding some ill-informed discussants. For Subah to have been paid $34 million means government itself received the remaining 87.5%.

Question three: How much additional tax revenue did government receive? Or, how much tax were the Telcos failing to pay in tax prior to Subah's involvement?: We need to sink slightly into some figures to establish the answer. We are told that Subah was paid $34 million by the GRA, representing 13.5% of a certain amount. The amount is $252 million, before Subah gets its commission; that is $34/13.5% in millions. So if Subah (and any other firm) had not been contracted, a whopping one quarter of a billion dollars of tax revenue would have eluded the state! Remember government is about to borrow $1billion through a Eurobonds issue soon. That should put the benefit of Subah's work into perspective especially when it is looked at in the light of interest payable on the Eurobond coupon plus 1% commissions payable to the banks hired to fix the deal. Each dollar of the Subah revenue is worth more than the Eurobonds.

Question four: Did Subah do ANY WORK for which it was paid? From the above, unless any argument can be adduced to prove that a company or an institution other than Subah 'caused' the positive variance in the revenues or that the Telcos just decided to be suddenly patriotic towards the state and Ghanaians, it is clear work was done ($252million was realised) from which $34million commission was paid. I hope Subah also paid their taxes from the $34million? If not I don't mind registering a new firmed called 'Nubah' to chase it.

At this point, one may be asking, 'over what period or cycle' have the Telcos been holding back taxes due the state? This is the legitimate question that we should all be asking. Even though this question does not seem to be on the front burner of the discussions so far, that question is relevant to the extent that it helps to establish the cummulative amount that eluded the state, based on how long the Telcos have, it seems, been EVADING tax due the state.

Indeed, the last time I checked, causing financial loss to the state is a jailable offence! And if deliberately and unlawfully witholding taxes due from the state amounts to causing financial loss, which clearly seems to be what the Telcos were engaged in, then someone needs to be ushered into the Ussher Fort prison. Abi?

I am looking for someone to show convincingly that Subah was paid "for no work done". 'Will the real slim shady please stand up'!

God bless Ghana.

Kofi Adoli. London.