12 November 2009
ABOUT TWENTY three non-Value Added Tax (VAT) registered companies, from whom the Kumasi Metropolitan Assembly (KMA) made purchases to the tune of GH¢361,320, are to ready themselves to refund the monies to the VAT Service, or face court action.
An audit on the financial management and procurement procedures at the Kumasi Metropolitan Assembly (KMA), revealed that the Assembly made purchases amounting to GH¢354,803 from non-VAT registered companies, contrary to section 183 (4) of the Financial Administration Regulations 2003 (L.I. 1802).
This, according to the report, led to the state losing a total amount of GH¢53,220 that should have been paid as VAT.
But an official KMA source says, based on the recommendation of an audit team, the said companies are to refund the monies to the VAT Service, since they benefited from whatever transaction transpired.
The KMA had been ordered to pay GH¢53,220, which the state lost from the illegal transaction to the VAT Secretariat. The companies include Osboat Trading Enterprise (GH¢26,024,500.00); SAF Systems (GH¢21,550,000.00); Floorzone Construction Service (GH¢186,000.00), Frimpong Manso Enterprise (GH¢7,043,000.00); Intercom Data Network Limited (GH¢22,320.000.00); Time Tech Electricals (GH¢12,072,000.00); K. N. Domfeh & Son (80,870,000.00), Duncan Engineering (GH¢14,362,500.00) and Shudio One (GH¢86,250,000.00).
The rest are New Okaff Industries, St. Mary Printing Press, Kwabebek Engineering, Danny Praise Computers,, NAGGLE Company, Pentax Mag. Construction Service, Messrs Bejoahaflex Ent., Star Activity System, Kusi Video Production, Heinz Integrated and SMICE International Limited.
The audit, which covered the period from July 2007 to December 2009, also detected that the KMA made other payments, but failed to obtain VAT receipts to support payment of a total of GH¢36,096.06, being VAT by suppliers and service providers, in contravention of VAT Act 546 of 1998 (L.I. 1646), which requires VAT invoices for all payments made to by clients, in respect of goods supplied and services rendered.
Following the recommendations of the audit team, the KMA would have to obtain VAT receipts or recover the amount from the 12 companies, including Web's Design and Fashion, Kayak Enterprise, Nyame Adom Tractor Fitting and Oman Fofor Intercom Data Network.
The KMA also made payments to the tune of GH¢116,546.88 without supporting documents like receipts and statement of expenditure.
There were purchases of items from the Internally Generated Fund, some of which included 40 boxes of biscuits and 30 boxes of toffees, insecticides, deodorant, rams, building materials, assorted drinks and food items, which were not routed through the stores.
An amount of GH¢62,667.19 was said to have been paid to payees, including Say Cheers, Poku Trading, Danny Praise Commuters, Queens Enterpise, Good Name Metal Works, Nadville, Woermann and Copal Enterprise.
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