Act 1079 – risk of plea bargaining in trial of tax offences and corruption


On July 22, 2022, the president assented a bill to formally introduce plea bargaining to the administration of criminal justice in the country in respect of all offences. It bears the title: The Criminal and Other Offences (Procedure) (Amendment) Act, 2022 (Act 1079).

Plea bargaining is a process in criminal justice whereby an accused person relinquishes his right to go to full trial in exchange for some other benefits. Another name for plea bargaining is ‘negotiated plea’ – whereby in consideration of a guilty plea, the accused person will face lesser charges, will answer to a reduced number of offences, or receive a lesser sentence.

Prior to passage of Act 1079, the Ghanaian criminal jurisprudence on plea bargain agreements had remained unchanged since the Criminal and Other Offences (Procedure) Act, 1960 (Act 30) was passed more than half a century ago.

Considering the history of plea bargains in Ghana, Act 30 allowed for limited plea bargains in indictable offences. Besides, the Courts Act, 1993 (Act 459) allows for limited plea bargains where criminal offences result in fiscal loss to the state – which includes offences relating to corruption and tax evasion. So, this article seeks to examine the risk of plea bargaining in the trial of tax-related offences and corruption and corruption-related offences with the introduction of Act 1079.

What are the characteristics of a negotiated plea?

The main characteristics of plea bargaining are:

  1. The accused agrees to plead or pleads guilty to some or all the charges preferred against him;
  2. The accused pleads no-contest to some or all the charges preferred against him; or
  3. There will be no hearing on the charges which form the subject matter of the agreement.

What offences are exempted from plea bargains?

Generally, Act 1079 allows for plea bargaining (negotiated plea) in all criminal offences. However, offences such as treason, high treason, genocide, rape, defilement, genocide, robbery, kidnapping, murder, attempted murder, abduction, piracy and hijacking, as well as offences relating to public elections, are exempted from negotiated plea.

Tax offences and penalties

Generally, under the Revenue Administration Act, 2016 (Act 915) (‘the Act’), various offences and penalties are provided for tax-related offences, and they include:

  1. Penalty for failing to maintain documents: A person who fails to maintain proper documents as required by a tax law is liable to pay for each month or part of a month during which the failure continues seventy- five percent of the tax attributable to that period where the failure is deliberate.
  2. Penalty for failing to file tax returns: A person who fails to file a tax return as required by a tax law is liable to pay a penalty of five hundred currency points, and a further penalty of ten currency points for each day that the failure continues. In the case of communications service tax, the penalty is two thousand currency points and a further penalty of five hundred currency points for each day that the failure continues.
  3. Penalty for making false and misleading statement: The Revenue Administration (Amendment) Act, 2020, (Act 1029) has amended four sections of the Revenue Administration Act, 2016, (Act 915). The amendments under Act 1029 comprise modifications of the penalty for making a false and misleading statement. The Amendment of Act 1029 provides that:

A person who makes a statement to a tax officer that is false or misleading in a material particular; or omits from a statement made to a tax officer, any matter or thing without which the statement is misleading in a material particular is liable to a penalty of one hundred percent of the tax shortfall where the statement was made without reasonable excuse; or thirty percent of the tax shortfall in any other case.

In other words, a person is liable to pay one hundred percent of the shortfall – i.e., the underpayment of tax as a result of the inaccuracy of the statement he made to mislead a tax officer. And he is liable to pay thirty percent of the shortfall in any other case. In doing so, the penalty imposed shall cumulatively increase by twenty percent for each subsequent application of this law to the person who commits the offence of making a false and misleading statement to a tax officer.

In addition to that, other enactments such as the Income Tax Act, Excise Tax Stamp Act, 2014 (Act 873), Customs Act, 2015 (Act 891), Value Added Tax Act, 2013 (Act 870), provide various degrees of penalties for tax offences.

Corruption and corruption-related offences

The Office of Special Prosecutor Act, 2017 (Act 959) was enacted to establish the Office of Special Prosecutor (OSP) as a specialised agency to investigate specific cases of alleged or suspected corruption and corruption-related offences involving public officers and politically exposed persons in the performance of their functions; as well as persons in the private sector involved in the commission of alleged or suspected corruption and corruption-related offences.

Moreover, corruption was a misdemeanor (a jail term of between two and five years) until Parliament passed the Criminal Offences (Amendment) bill 2020 (‘Act 1034’), categorising the offence of corruption as a felony. Act 1034 introduces stiffer punishment for engaging in corrupt practices. Thus, following the amendment a person found guilty of engaging in any form of corrupt act can go to jail for not less than 12 years and not more than 25 years.

Tax-related offences and corruption

Tax evasion breeds corruption or vice versa. A classic example is the OSP report of alleged corrupt activities involving Liabanca Group of Companies and the Customs Division of the Ghana Revenue Authority. The report reveals that the owner of the company, Eunice Jacqueline Buah – who doubles as Board member of the Ghana Ports and Harbour Authority (GPHA) and a Member of the Council State (Ghana) – took advantage of her position to contrive with the Customs Division of Ghana Revenue Authority (GRA) to be given a preferential tax regime (PTR) which lowers the company’s tax rate and allows simpler tax compliance requirements than the mainstream tax regime.

The OSP has following the report launched a full-blown investigation of the benchmark value of the company from 2017 to 2021 for trial.

Trial of tax offenders

Pursuant to Act 915, a person who commits an offence relating to tax will face criminal trial. Based on that, the Chief Justice in his prudence has established a Tax Court as Division of the High Court purposely for the prosecution of tax offenders. The Court which commenced in October 2021 to prosecute persons who fail to pay on due date or make false or misleading claims to the GRA.

This move was to ensure adequate revenue generation for the state in tax by prosecuting and punishing tax offenders. When accused persons are found guilty, the punishment for their offences may include attachment of assets and sale of the assets and/or imprisonment.

Plea bargaining in trials

Under plea bargaining, the person under investigation or charged with tax offences may voluntarily admit the offence and make an offer of restitution to the prosecutor by negotiation for lesser charges or reduced sentence. In addition, the person may also admit the offence and offer to provide information that will aid the arrest and prosecution of other persons who are involved in the commission of tax offences.

The prosecutor will agree to a reduction in the number of charges proffered against the accused, or an amendment of the charges to a less serious one or a recommendation to the judge of a sentence that will be favourable to the accused, where the offender faces multiple charges.

Consequently, the original charges against an accused will be dismissed following the plea offered by the offender, or will be substituted with fresh, lower charges. Technically, the negotiated agreement is between the accused and the prosecutor. This is because once the accused pleads guilty to the lesser charge, it is up to the prosecutor to accept or reject the plea.

Risk of plea bargaining

The purpose for negotiating a plea for a tax offender is to truncate an otherwise full, elongated and costly trial by tabling a plea bargain before the prosecutor, or accepting one from the prosecutor.

But the risk of plea bargaining in the prosecution of a tax offender is that prevalent use of plea bargains may encourage widespread tax evasion and corruption in Ghana by offenders hoping that a prosecutor will accept a plea bargain for the prosecutor and investigator to shortcut the investigation – resulting in no or poor trial of the offenders, or lesser or no penalty.

In addition, the defence counsel may be ill-prepared in any case, knowing that an accused person is seen as likely to take a plea bargain although the accused person may be innocent.

Furthermore, lack of investigation and lack of attention to the fine details of tax evasion because of a pending plea bargain, either as a prosecutor or a defence counsel, signifies danger for our criminal justice system and tax revenue – the least of which is whittling down of our criminal justice system and a significant reduction of our tax to Gross Domestic Product (GDP) ratio and Domestic Revenue Mobilisation (DRM).

>>>the writer is a professional law student. Email: [email protected]

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