Free Zones companies playing tricks on regulator

  • They submit no quarterly financials
  • They lie about status of expat employees
  • And they flout the law, sellING above 30% of products locally

Most of the over 200 enterprises operating within the free zones enclave have failed to submit quarterly financial statements to the Ghana Free Zones Authority (GFZA), and have been working with expatriate staff who have “visitor” status in the country, a situation that works against tax collection, the authority’s CEO, Michael Okyere Baafi, has said.

“So far, less than 20 companies have submitted their financial statements; and these are the same companies that continue to comply with the rules,” he told CEOs of licenced free zones enterprises from the Eastern, Greater Accra and Volta Regions at a one-day forum in Accra.

“Most of the companies are not submitting their books because they have expatriate working staff with visitor’s permits in the country,” he said.

“Some of them also come with falsity and misrepresentation of information that affects the GFZA’s reporting to government,” he said.

More grievously, he said, some of the quarterly reports are presented with false information, as most companies do not comply with the basic requirement on free zones companies to sell only 30 percent of products locally and export the remaining 70 percent.

See Also:  Growth in sub-Saharan Africa remains below 3%, three years after crisis

“We have had complaints of free zone enterprises selling more than the stipulated 30% on the local market,” he said.

He disclosed that most of the companies owe ground rent, and some have not renewed their licences – which has greatly affected finances of the GFZA.

The Ghana Free Zones Programme is designed to promote processing and manufacturing of goods through the establishment of Export Processing Zones (EPZs), and encourage the development of commercial and service activities at sea and airport areas.

It works to create a conducive atmosphere for foreign investments and currently has capital investment worth over US$3.4 billion, with over 200 companies.

The free zones enclave has been exporting an annual average of US$1.5 billion worth of products since its establishment in 1995, or some US$30.9 billion over the past two decades.

Its focus, currently, is to do some US$5.4 billion of exports in 2018, by licensing more free zones companies.

Establishment of New Units

The authority intends to set up and Oil and Gas Unit, to assist investors in that sector, whilst a Research and Business Development Unit has also been created to undertake market intelligence and source new markets for companies that wish to venture into new markets and not rely on one traditional market.

See Also:  Eyram Bashan leads the conversation on gender issues

Security at the Tema Export Processing Zone (EPZ), he said, will be increased. The GFZA, in this regard, is having discussions with the Ghana Armed Forces to provide a military detachment at the Tema EPZ.

Michael Okyere Baafi told CEOs of the free zones companies that the IT unit at the authority has been made more robust and expanded into a Management Information Systems (MIS) Department.

He said his outfit is working on creating the needed platforms to implement a paperless system and ensure that most documents, including quarterly returns, can be submitted online.

“With the introduction of speed as a business strategy, you – our clients – will be a better judge of that. I hope you have experienced an improvement in the time for processing your documents.”

He indicated that a business centre is coming up at the Tema enclave as a Free Zones enterprise. This is to take care of the business needs of FZEs and other multi-national companies around.

This, he said, will serve as a community centre for the enclave – with amenities like meeting and conference halls, event centres, a health-care centre and shopping mall.

Leave a Reply

Please Login to comment
  Subscribe  
Notify of