Construction Pioneers Evaded 142 Million Euro Tax

Construction Pioneers (CP) a German construction firm evaded a total tax liability of 284 million deutschmark (142 million Euros) due to the government of Ghana, under a contract to construct a number of roads between 2000 and 23005. This was disclosed yesterday by representatives from the Ghana Revenue Authority (GRA), led by its Commissioner General, Mr. George Blankson, who appeared before the Public Accounts Committee of Parliament to answer questions in connection with the payment of 94 million euros as judgment debts to CP as captured in the Auditor General�s Report on Consolidated Funds for 2009. The GRA representatives were part of a team from the Ministry of Finance and Economic Planning led by the Chief Director, Enoch Cobbina. Mr. Kwame Ofosuhene Apenteng, of the GRA told the committee how the Ministry of Finance presented documents to the Authority in 2005 to assess the total tax liability of CP. He said the authority, established that CP owned the government 284 million deutschmark and GH�300,000 including penalties. Mr. Apenteng said a letter was sent to the construction company informing them about their tax liability but they objected it claiming that they were exempted from paying taxes in the country. He said the explanation given by CP was not credible because their tax exemption status did not have any legal backing from Parliament. That, he said, generated a dispute between GRA and CP over the basis of the tax exemption until the Ministry of Finance requested the Authority to return the documents they used to assess the total tax liability of the company. After that order, he said the issue about the tax liability of CP came to a halt but insisted that there was a clear incident of tax evasion by the company. Earlier, the Minister of Roads and Highways, Mr. Joe Gidisu, who appeared before the committee in connection with the same issue said government under Kufuor�s administration, also made a payment of $15 million to CP following the company�s threat to take over some assets of government in the United Kingdom. He said government would have saved $6 million if it had settled all the claims from CP in 2003. He said CP, in 2001, presented overdue certificates with interests amounting to 40 million deutschmark and extended performance cost of 23 million deutschmark to government. Government, he said, accepted to pay the overdue certificates but refused to pay the extended performance costs which resulted in the legal suit by CP. The Chairman of the committee, Albert Kan-Dapaah, said the committee had observed that some witnesses deliberately conceal and suppress information that would enable the committee to establish the circumstances that led the 94 million euro liability. He, therefore, admonished all witnesses to deliver nothing but the whole truth as they are enjoined under oath.