The Commissioner-General of Ghana Revenue Authority (GRA), Rev. Dr. Ammishaddai Owusu-Amoah, has announced that the Authority will assist struggling companies in their recovery process.
While the tax authority is fully prepared to enforce compliance measures mandated by the law, he said the primary goal is to support the revival of companies and ensure uninterrupted production – especially on the back of economic difficulties faced over the past few years.
“The fact is that whatever compliance measures are available in the law, GRA is ready to implement them to the letter. But while we are committed to enforcement, we also aim to revive companies and ensure continuous production,” the Commissioner-General stated during a working visit to B5 Plus Limited – a steel manufacturer located in Tema.
He added: “Whether small or large, we are ready to ensure the collection of taxes in full. But at the same time, we are also concerned that production should continue and people not be laid off”.
GRA recently closed Sol Cement due to its failure to fulfil its tax obligations. The Chinese cement manufacturing firm’s outstanding tax debt was estimated to exceed GH¢700million.
It also uncovered VAT infractions at 12 businesses in Accra during August. The businesses were found to have committed various tax violations, such as failure to register for VAT and non-issuance of VAT documentation.
He however reiterated that the Authority is more interested in supporting distressed companies to see a turnaround, and closures are only the last resort.
The GRA has set a revenue target of GH¢106billion, with the Customs Division expected to collect GH¢28.5billion in 2023 – and a total of 93 businesses in the capital have been listed as targets for enforcement and compliance this year.
The United Steel Company story
United Steel Company Limited, as far back as 2020, had an outstanding tax liability principal of about GH¢149million. The interest and penalties accrued starting from 2018 was also over GH¢400million. In addition, it owed banks and other creditors.
The GRA together with banks sought the services of an administrator to take over the factory.
“We then placed the factory for sale and advertised it in the papers; we succeeded in getting B5 Plus to buy the company,” the GRA’s Commissioner-General recalled.
“And after they bought the company, they paid the tax liabilities in full because the administrator had then applied for and took advantage of the waiver of interest and penalties. And so, the GH149million we had been chasing from 2020 was fully paid in 2023,” he added.
Explaining further, he said: “The factory has also, as you saw today, been completely put back on its feet and is able to produce; and we’ll be getting over GH¢100million annually in terms of taxes. We are more interested in seeing companies grow to meet their tax obligations. So the mentality or sad notion that GRA is only interested in getting the money, and not so interested in whether the company will survive or not is not true”.
US$35million invested to revamp the factory
Chief Executive Officer-B5 Plus Limited, Mukesh Thakwani, praised the domestic investment climate and highlighted the abundance of opportunities.
He said his company has already invested over US$35million in revitalising the factory. Additionally, with expansion of the production line over the next two years, the company plans to invest an additional US$10million, he noted.
“It has been quite challenging for us. What we expected and what we found on the ground was quite different; but a lot of credit goes to the entire team for being positive and optimistic, and we are really looking forward to the future.
“I think this is one of the reasons that though we are working 24 hours it has still taken six months – and it will take another one and a half months for us to start this plant. Our target is that before December we should at least be able to make some trials, so that from next year we are able to run this plant successfully and make everyone proud,” Mr. Thakwani said.
The company presently employs 420 workers, but this number could soon increase to over 500 as additional product lines are introduced.
“We are not only targetting Ghana and the West Africa sub-regional market, but the whole Africa; we want to take advantage of AfCFTA,” he added.